GDRs Set To Make A Comeback In Indian Market

Mumbai, December 12: In a yet another stimulus for the India’s corporate sector the centre has opened up yet another channel for the listed corporates to raise funds through issue of Global Depository Receipts (GDRs). The capital market regulator Securities and Exchange Board of India (Sebi) had notified the framework for issuance of Depository Receipts (DRs) in October 2019 and now it has released list of Permissible Jurisdictions and International Exchanges (IEs), where these DRs can be issued and traded.

This list of permissible jurisdictions includes; Nasdaq & NYSE (USA), Tokyo Stock Exchange (Japan), Korea Exchange Inc (South Korea), Londoan Stock Exchange (LSE), UK, Euronext Paris (France), Frankfurt Stock Exchange (Germany), Toronto Stock Exchange (Canada) and Financial Services Centre in India - India International Exchange and NSE International Exchange (GIFT City, Gandhinagar, Gujarat).

Among other things, Sebi circular said, “A listed company shall be permitted to issue

permissible securities or transfer permissible securities of existing holders, for the

purpose of issue of DRs, only in permissible jurisdictions and said DRs shall be listed

on any of the specified international exchange(s) of the permissible jurisdiction”.  

V. Balasubramaniam, Managing Director & CEO, India International Exchange (India INX), a BSE Group company said, “India INX is very excited with the listing framework for depository receipts announced by Sebi. This will enable Global DRs to be listed on India INX at GIFT City and will enable long term investment products to be made available to investors across the world on Indian equity shares, which are the underlying for the GDRs”.

Sandip Shah, Senior Partner (capital markets), N A Shah Associates said, “The regulator should have expanded the list of permissible jurisdiction and exchanges from the middle east should also have been accommodated. More and more investors –both retail as well as corporarates--from these geographical locations have evinced interest to invest in India’s growth story. This will not only benefit the foreign investors but will also be beneficial to Indian economy but the Indian corporate sector could also get its benefit.”