In a significant move, the Cabinet on Wednesday approved a proposal to allow listing of Indian companies overseas. For this framework, an enabling provision would be made under the Companies Act, 2013.
Apart from providing an additional fund raising avenue for the corporates looking to expand and boost their business activities, overseas listing of shares would also help in bringing more capital into the country.
Corporate Affairs Secretary Injeti Srinivas said the Act would have an enabling provision for listed as well as unlisted companies in India to list their shares abroad.
The provision would be subject to certain conditions. "So making this enabling provision... that is the proposal which Cabinet has approved," he said.
According to him, it would be a broad enabling provision. The class of companies, types of instruments that can be listed and other things would be notified in the rules.
The rollout of the scheme in this regard might take a few months, he added. "Now, like just you had a scheme for GDR/ADR, what will be the tax treatment and other issues?. Most of it (will) get covered in subordinate legislation. It does not involve any amendment per se to the best of my understanding," Srinivas said.
He along with Finance Minister Nirmala Sitharaman were also present at the briefing.
A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes GDRs.