SPONSORSHIP OF ADR/GDR ALLOWED

The Government has recently announced that unlisted Indian companies would now be allowed to sponsor an issue of American Depository Receipts (ADRs) or Global Depository Receipts (GDRs) with an overseas depository against the shares held by its shareholders. Under a sponsored ADR / GDR programme, a majority shareholder in a company gets an opportunity to divest a portion of his holding in the overseas market through issuance of ADRs or GDRs. Such a window for divesting abroad is also made available to other shareholders in the company.