Wednesday, January 15, 2014

Unlisted companies can list abroad

Currently, unlisted companies are not allowed to directly list in overseas markets without prior or subsequent listing in Indian markets. The Department of Industrial Policy & Promotion (DIPP) has said that unlisted companies shall be allowed to raise capital abroad without the requirement of prior or subsequent listing in India initially for a period of two years. While raising funds abroad, the listing companies would have to be fully compliant with the FDI policy. The department also stated that unlisted companies can directly list abroad only on exchanges in International Organisation of Securities Commissions (IOSCO)/ Financial Action Task Force (FATF) compliant jurisdictions or those jurisdictions with which SEBI has signed bilateral agreements. In case the funds raised are not utilised abroad for retiring debt or acquisitions, the company should repatriate the funds to India within 15 days and park it with a scheduled bank and may be used domestically. The Reserve Bank of India (RBI) notification of November 8 had said that the pricing of such ADRs/GDRs to be issued to a person resident outside India would be determined in accordance with the FEMA norms and the listing company would also have to comply with the instructions on downstream investment.

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