Indian cos allowed to sponsor ADR/GDR issues

By Our Special Correspondent

NEW DELHI, APRIL 16. The Finance Ministry today permitted a listed Indian company to sponsor an issue of ADR/GDR with an overseas depository against shares held by its shareholders.

According to modified and revised guidelines issued in this regard, such a facility would be available pari-passu to all categories of shareholders of the company whose shares are being sold in the ADR/GDR market oversees.

However, all such issues would have to conform to the FDI policy and other statutory requirements.

They will have to also abide by the provisions of Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulation, 2000, notified by the Reserve Bank of India under FEMA.

It may be recalled that the Finance Minister had during his budget speech said that Indian companies will be permitted to list in foreign stock exchanges sponsoring ADR/GDR issues against block share holding and that this facility would be offered to all categories of shareholders. As a first step in that direction, the RBI had on March 2 issued the FEMA notification.

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Section  : Business
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