Adr and gdr

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Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2014 Can anyone help with details of ADR and GDR? Under which guidelines are they regulated and the governing authority?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 December 2014 Indian companies are allowed to raise capital in the international market through the issue of ADRs/GDR. They can issue ADRs/GDRs without obtaining prior approval from RBI, if it is eligible to issue ADRs/GDRs in terms of the scheme for issue of foreign currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and subsequent guidelines issued by Ministry of Finance, Government of India.

After the issue of ADRs/GDRs, the company has to file a return in the form given in Annexure 'C' to the RBI Notification No. FEMA.20/ 2000-RB dated May 3, 2000. The company is also required to file a quarterly return in a form specified in Annexure ‘D' of the same regulations.

There are no end-use restrictions on GDR/ADR issue proceeds, except for an express ban on investment in real estate stock markets.

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2014 Thank you so much.. Can an unlisted Public Company issue ADR? Is there any amendments for the same?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 December 2014 INDIAN UNLISTED COMPANIES ALLOWED TO LIST INTERNATIONALLY: ANOTHER EXIT ROUTE FOR INVESTORS?
Unlisted companies allowed to issue ADRs/ GDRs without the requirement of prior, simultaneous or subsequent listing on Indian stock exchanges;
Relaxation for a limited period of two years only, as of now;
Capital raised may be used for offshore purposes; else must be repatriated to India for domestic purposes, within 15 days.
The Ministry of Finance (“MoF”) through a press release dated September 27, 2013 (“Press Release”)1, has permitted unlisted Indian companies to list directly on offshore stock exchanges without prior or simultaneous or subsequent listing in India, which was not permitted earlier. This move comes in the backdrop of relatively weak domestic capital markets with very few successful Initial Public Offers (“IPOs”) of Indian companies in recent times and India’s increasing current account deficit. The MoF has permitted Indian unlisted companies to list their American depository receipts (“ADR”) global depository receipts (“GDR”) or foreign currency convertible bonds (“FCCB”) abroad on a pilot basis for two years without a listing requirement in India.

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2014 Thank you so much sir for your prompt help.

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