rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Govt allows unlisted companies to directly list abroad

Govt allows unlisted companies to directly list abroad

September 27, 2013 17:04 IST

Indian ParliamentFaced with high current account deficit, the government on Friday allowed unlisted companies to directly list on stock exchanges abroad to raise funds for acquisitions or retiring debts.

As of now, unlisted companies are not allowed to directly list in overseas markets without prior or simultaneous listing in Indian markets.

"It has now been decided with the approval of the Union Finance Minister that unlisted companies may be allowed to raise capital abroad without the requirement of prior or subsequent listing in India," the Finance Ministry said in a statement.

Such companies would be permitted to list abroad only on exchanges in International Organization of Securities Commissions/Financial Action Task Force compliant jurisdictions or countries with which SEBI has signed bilateral agreements.

This scheme, it said, will be implemented on a pilot basis for a period of two years from the date of notification and then the impact of this arrangement will be reviewed, the statement added.

"While raising resources abroad, the listing company shall be fully compliant with the FDI Policy in force.

“The capital raised abroad may be utilised for retiring outstanding overseas debt or for operations abroad, including for acquisitions," the Finance Ministry said.

In case the funds raised are not utilised abroad, the Ministry said, such companies will have to remit the money back to India within 15 days.

The money will parked only in banks recognised by RBI.

Notifications in this regard will be issued by Ministry of Finance, Department of Industrial Policy and Promotion and Reserve Bank of India in due course.

The government has set a target to bring the CAD, which touched a record high to 4.8 per cent of gross domestic product last fiscal, to 3.7 per cent level in the current financial year.

Rupee value versus US dollar has been affected severely because of high CAD and other global factors.

© Copyright 2013 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.