With no response yet for the ambitious scheme to make overseas companies issue Indian Depository Receipts (IDRs), the Securities and Exchange Board of India (SEBI) feels India is not yet ripe for it.
As India began globalising the economy after 1991, SEBI wanted the country to match Europe’s Global Depository Receipts (GDRs) and US-listed American Depository Receipts..
“We don’t know yet whether we have reached that stage,” a senior SEBI official told Hindustan Times.
“For issuing IDRs there should be need for foreign companies to raise capital in India either because of a viable economic size of business in India or they feel they have sufficient expenditure to make in India or that our markets are so good and liquid that they want their shares traded here.”
On June 16, SEBI revised guidelines for companies that are domiciled in International Organisation of Securities Commission (IOSCO) member countries to ease up their listing process in India. The regulator did this to make the process easier for them and to prepare itself for such moves by foreign companies.
The official said SEBI received some enquiries from companies wanting to raise funds through IDRs, but none turned into a concrete proposal. “It is good to be ready so that if somebody comes in, we are ready with the infrastructure,” said the official.