Foreign companies may soon find it more attractive to list their securities in the stock market in Mumbai, with regulatory authorities mulling changes in certain features of issuing Indian Depository Receipts with an aim to make it more competitive in terms of costs and disclosures.
IDRs, Indian equivalent of American and Global Depository Receipts (ADRs/GDRs), would allow foreign companies to raise funds from the local market directly.
The Securities and Exchange Board of India is currently reviewing the feedback from companies interested in listing their IDRs in the country and based on this exercise, it could amend the existing rules to make it more competitve for the issuers, informed sources told PTI.
The changes may be put in place soon and the regulator is looking at some IDRs being listed in 2008 itself, they said.
The guidelines related to issue of IDRs were instituted in 2004, but have failed to attract foreign companies due to the norms not being competitive enough, according to industry sources.
The presence of foreign companies on Indian bourses, at present, is mostly through their subsidiaries operating in the country. The sources said the authorities are of a view that the feedback received so far was "hugely positive", but had also sought some more "tweaking" in the rules. Sebi is also in touch with the Ministry of Corporate Affairs in this regard, they said.
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