Indian companies now have the option to list their global depository receipts at the international financial services centre in Gujarat, with the government amending the rules.
The move would help companies in having another avenue for raising funds.
The corporate affairs ministry has amended the Companies (Issue of Global Depository Receipts) Rules, 2014, permitting listing of Global Depository Receipts (GDRs) at Gujarat International Finance Tec-City (GIFT).
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.
“The depository receipts can be issued by way of public offering or private placement or in any other manner prevalent in the concerned jurisdiction and may be listed or traded on the listing or trading platform in the concerned jurisdiction,” the ministry said in the amended rules.
Under the earlier rules, it was mentioned that depository receipts can be issued by way of public offering or private placement or in any other manner prevalent abroad and may be listed or traded in an overseas listing or trading platform.
As per the changed rules, proceeds from a GDR issue can be remitted in an Intenational Financial Services Centre Banking Unit (IBU).
An IFSC enables to bring back to India the financial services and transactions that are currently carried out in offshore financial centers by Indian corporate entities and overseas branches or subsidiaries of financial institutions.
Currently, some Indian companies have their GDRs listed overseas. A few corporates also have American Depository Receipts (ADRs) traded in the US.
Separately, the government is expected to take a decision on permitting Indian companies to list their equity shares overseas.