Mumbai, Jan 20: The Reserve Bank of India (RBI) on Thursday granted generalpermissions under the Foreign Exchange Regulation Act (Fera-1973) to Indiancorporates to issue rupee denominated equity shares by way of AmericanDepositary Receipts (ADRs) and Global Depositary Receipts (GDRs).The move follows the Centre's decision to allow companies to tap the ADRsand GDRs market without prior approval from the finance ministry. Thenecessary permissions under Fera-1973 for issue and export of ADRs/GDRs bythe Indian company and acquisition of ADRs/GDRs by foreign investors havealso been granted. "Issuing companies may now enter into agreements inrespect of or ancillary to the offer including but not limited to thesubscription agreements and deposit agreement and to provide the necessarywarranties and indemnities in accordance with international practices," saida RBI release issued on Thursday.
The central bank said that depositories are allowed to remit dividends bypurchasing foreign currency at market rates through authorised dealers.According to the central bank release, various other permissions necessaryfor launching an ADR/GDR issue have also been granted to the issuingcompanies.
The centre on Wednesday removed the track record scrutiny process forADR/GDR issues, thus liberalising operational guidelines for Euro issues.
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