THE Indian Cabinet on Wednesday (4) approved a proposal to allow listing of Indian companies overseas.
The country will make an enabling provision under the Companies Act, 2013, said minister Prakash Javadekar.
Currently, quite a few Indian companies have American Depository Receipts (ADRs) that are traded in the US.
Some other corporates have their Global Depository Receipts (GDRs).
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.
India expects to bring more capital into the country through overseas listing of Indian shares.
Besides, it would provide an additional fund raising avenue for the corporates looking to expand and boost their business activities.
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, subject to certain conditions.
The Department of Economic Affairs is working on a scheme to announce the rules for the regulatory clearances and the requirements companies need to fulfill to be listed abroad, a senior government official said.
"The current rules regarding the listing of GDRs (Global Depository Receipts) would likely be refined," he said.
Different wings of the government, like the Reserve Bank of India, Securities and Exchange Board of India (SEBI), the department of economic affairs and the ministry of corporate affairs would together work out the rules of listing.
"Public companies will get this opportunity. If the Companies Act amendments get cleared by Parliament in this session then we will try to prepare rules as early as the government can," the official said.
For tapping foreign investors, Indian firms take the American Depository Receipt (ADR) or the GDR route.
Companies that have used the same to access the foreign investor pool are ICICI Bank, Infosys, HDFC Bank and Reliance Industries.
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