IDRs to be introduced by 2007: SEBI chairman

This would ensure that domestic and foreign companies raise funds in Indian market in a cost effective way.

Market regulator Securities and Exchange Board of India (SEBI) proposes to introduce Indian Depository Receipts (IDRs) in the Indian Capital Market by 2007, SEBI Chairman M Damodaran said.

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This would ensure that domestic and foreign companies raise funds in the Indian market in a cost effective manner. In the next 12-18 months, some of the biggest companies in the world will be filing for IDRs in India, Damodaran said while delivering the ninth KP Hormis Memorial Lecture organised by the Febbank KP Hormis Trust in Kochi on Monday night.

Other initiatives being planned by SEBI are a dedicated exchange for Small and Medium Enterprises (SMEs) by next year and a comprehensive training institute for capital market personnel in Mumbai. The world class institute would be set up on public private partnership, he said.

Along with imposing regulations, SEBI also wanted to reach out to investors and was in the process of starting a major investor campaign, which would be funded by the Investment Protection Fund (IPF), he said.

The government's decision was being awaited on whether foreigners can invest in Indian stock exchanges. The ownership structure of the stock exchanges would be different in the coming few months, he said.

Though there are more than 950 registered Foreign Institutional Investors (FIIs) in India, there was no need to fear that FIIs held sway in the Indian capital market. "We will ensure that our markets are open to FIIs," Damodaran said.