Govt likely to allow issuance of depository receipts against debt
At present, Indian companies issue ADR and GDR to foreign investors against underlying value of shares.
The finance ministry is working on widening the scope for issuance of foreign-listed securities by Indian firms against debt, sources said. Besides, it is also considering the option of giving ADR and GDR holders voting right to make such securities more attractive to foreign investors, they added.
ADRs are traded on the US stock markets like New York Stock Exchange and Nasdaq.
GDR are traded on stock exchanges at other parts of the globe. These instruments are usually denominated in foreign currency.
Reliance Industries and Grasim Industries were the first Indian companies which accessed the foreign equity market by issuing ADRs in 1992.
In the interim Budget speech Finance Minister P Chidambaram had said that the government would "comprehensively revamp the American depository receipt and global depository receipt scheme and enlarge the scope of depository receipts".
Besides, the government would take a number of steps to energise and deepen the country's corporate bond as well as currency derivatives market, he had said.
The proposed initiatives are primarily meant for attracting
retail and high networth investors towards this segment and are aimed at helping India Inc raise long-term funds in a cost-effective manner from overseas markets.