The government is considering a proposal to allow companies to issue depository receipts like ADR and GDR against debt instruments, in a bid to deepen financial markets.
At present, Indian companies issue American depository receipts (ADR) and global depository receipts (GDR) to foreign investors against underlying value of shares. The finance ministry is working on widening the scope for issuance of foreign-listed securities by Indian firms against debt, sources said.
Besides, it is also considering the option of giving American depository receipts and global depository receipts holders voting right to make such securities more attractive to foreign investors, they added. American depository receipts are traded on the US stock markets like New York Stock Exchange and Nasdaq. Global depository receipts are traded on stock exchanges at other parts of the globe.
These instruments are usually denominated in foreign currency. Reliance Industries and Grasim Industries were the first Indian companies which accessed the foreign equity market by issuing ADRs in 1992. In the interim Budget speech finance minister P Chidambaram had said that the government would “comprehensively revamp the American depository receipt and global depository receipt scheme and enlarge the scope of depository receipts”.
Besides, the government would take a number of steps to energise and deepen the country’s corporate bond as well as currency derivatives market, he had said.