Guidelines for Indian depository receipts soon: DCA

NEW DELHI: The Department of Company Affairs (DCA) will soon notify detailed guidelines for multinational companies wanting to list on Indian stock exchanges via the Indian depository receipt (IDR) route.
The IDR will be another option to the MNCs to raise funds from the Indian public besides the initial public offer (IPO) route already open, official sources said here on Tuesday.
The proposed guidelines for an IDR will be on the lines of the American depository receipts (ADR) and global depository receipts (GDR) options available to Indian companies for listing overseas, they added.
Sources said DCA is in the process of consulting market watchdog Securities and Exchange Board of India (Sebi), Institute of Chartered Accountants of India (ICAI) and the Institute of Company Secretaries for framing these guidelines and these are expected to be announced within a month.
"We are consulting Sebi and the institutes at present. The guidelines will include instructions on whether MNCs can use the depository route, can they hold roadshows, does Sei need to be involved in the pricing issue and what all are the disclosure requirements," they said.
Responding to suggestions from various sections of the Indian industry, Finance Minister Jaswant Singh had announced recently that the government was considering introducing IDRs to encourage MNCs to raise funds from the Indian market.
Sources said the guidelines will be notified as a rule under Section 605 (A) of the Act.