Press Release dated 27th September, 2013 –
Ministry of Finance, Government of India Notification dated October 11,
2013 issued by the Ministry of Finance (Department of Economic Affairs) –
G.S.R. 684(E)
Amendment to the “Issue of Foreign Currency
Convertible Bonds and Ordinary shares (Through Depository Receipt
Mechanism) Scheme, 1993”
Presently, unlisted Indian
companies that have not yet accessed Global Depository Receipts/Foreign
Currency Convertible Bond route for raising capital in the international
market are required to have prior or simultaneous listing in the
domestic market.
This circular permits, initially for a period
of two years, unlisted companies incorporated in India to raise capital
abroad without prior or subsequent listing in India. The Indian company
must fulfill the following conditions: –
(a) Unlisted Indian
companies can list abroad only on exchanges in IOSCO/FATF compliant
jurisdictions or those jurisdictions with which SEBI has signed
bilateral agreements.
(b) The ADR/GDR can be issued subject to
sectoral cap, entry route, minimum capitalisation norms, pricing norms,
etc. as per FDI regulations notified by the RBI from time to time.
(c)
The pricing of such ADR/GDR has to be determined in accordance with the
provisions of paragraph 6 of Schedule 1 of Notification No. FEMA. 20
dated 3rd May 2000, as amended from time to time.
(d) The number
of underlying equity shares offered for issuance of ADR/GDR that have to
be kept with the local custodian has to be determined upfront and the
ratio of ADR/ GDR to equity shares has to be decided upfront based on
FDI pricing norms of equity shares of unlisted company.
(e) The
unlisted Indian company has to comply with the instructions on
downstream investment as notified by the RBI from time to time.
(f)
The capital raised abroad can be utilised for retiring outstanding
overseas debt or for bona fide operations abroad including for
acquisitions overseas.
(h) In case the funds raised are not
utilised abroad, the company must repatriate the funds to India within
15 days and such money must be parked only with banks recognised by RBI
and can be used for eligible purposes.
(i) The unlisted company will have to file reports with RBI as may be prescribed.
