ANKIT GUPTAANKIT BAWA

NIKHIL JOSHIPANKAJ BHARDWAJ

ISHA SACHDEVAPGDM- IVth Semester

FOREIGN DIRECT INVESTMENT ,EURO

ISSUE & DEPOSITORY RECEIPTS,GDR/ADR

INTRODUCTION

India opened its stock market to foreign investors in  September 1992.

since 1993,received portfolio investment from foreigners in the form FII

In order to trade in Indian equity market foreign corporation need to registered with SEBI as FII.

FOREIGN INSTITUTIONAL INVESTOR

• A foreign Institutional Investor (an "FII") as an institution established or incorporated outside India which proposes to make investment in India in securities of companies incorporated in India (“Indian Companies”)

FOREIGN INSTITUTIONAL INVESTOR

An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing.

Institutional investors include hedge funds,Insurance companies,Pension funds and mutual funds.

ENTITIES /FUNDS ELIGIBLE TO GET REGISTERED AS FII:

Pension FundsMutual FundsInsurance CompaniesInvestment TrustsBanksEndowmentsFoundationsCharitable Trusts/Charitable Societies

REGISTRATION PROCEDURE OF FOREIGN INSTITUTIONAL INVESTOR

As per Regulation 6 of SEBI (FII) Regulations,1995The applicant should be regulated by an appropriate foreign regulatory authority

The applicant is required to have the permission under the provisions of the Foreign Exchange Management Act, 1999from the Reserve Bank of India.

Applicant must be legally permitted to invest insecurities outside the country or its in-corporation /establishment.

Cont…..

The applicant must be a "fit and proper" person.The applicant has to appoint a local custodian and enter into an agreement with the custodian.

The fees for registration: US$ 5,000 for an FII account US$ 1,000 for each sub account. SEBI targets a timeline of 10 to 12 days for processing of FII applications. 

Valid for 5 years.

 

 

WHO CAN BE REGISTERED AS AN FII’s ?

Pension FundsMutual FundsInsurance CompaniesInvestment TrustsBanksEndowmentsFoundationsCharitable Trusts/ Charitable Societies

FII’s INVESTMENT IN LAST 10 YEARS

FII’s as major cause of market crash(Jan 21 to Jan 29 2008)

The Indian capital markets have been left reeling under the impact of liquidity crunch  caused by multiple factors

It began with two mega issues of reliance power and future capital holdings, which drew out huge amounts of money from the market

FIIs withdraw from the capital market with more than Rs 10000 crores.

Definition of FDI

• Foreign direct investment is that investment , which is used to made the business interests of the investor in a company, which is in a different nation distinct from the investor’s country of origin.

• The parent enterprise through its foreign direct investment effort seeks to exercise substantial ‘Control’ over the foreign affiliate company.

Exp. – An American company taking a majority stake in a company in India.

FOREIGN DIRECT INVESTMENT

• A foreign direct investor may be classified in any sector of the economy and could be any one of the following

• an individual;• a group of related individuals;• an incorporated or unincorporated entity• a public company or private company• a group of related enterprises• a government body• an estate (law), trust or other societal organization; or• any combination of the above.

Why is FDI important ?

• Firms want a presence in foreign markets• Firms want control over growth of these foreign markets

• To gain first mover advantage• To ward off competitors• To determine locations, advertising and other related strategic decisions in the firm’s interest.

Why India?• Liberal, largest democracy, Political stability.• Second largest emerging market (US$ 2.4 trillion)• Skilled and competitive labors force• Highest rates of return on investment• Second largest group of software developers after the U.S.

• Lists 6,500 companies on Bombay Stock• Low costs & Tax exemptions in SEZ• Has a middle class estimated at 300 million out of a total population of 1 billion

• Growth over the past few years averaging 8%

SHARE OF TOP INVESTING COUNTRIES –FDI INFLOWS (US$ Mn.)

Rank Country Total 2000 to 2009

% of total of all countries

1. Mauritius 39,379 44

2. Singapore 8,071 9

3. U.S.A 6,508 7

4. U.K 5,289 6

5. Netherlands 3,701 4

6. Germany 2,379 3

7. France 1,233 1

Differences….FDI and FIIFDI is when a foreign company brings capital into a company or economy to set up a production or some other facility

FII is when a foreign company buys equity in any company through stock market.

FDI gives some CONTROL in operation of foreign company to the foreign company.

FII does not give any control in operation of foreign company.FDI brings long term capital.

FII brings short term capital.

FDI involves in direct production activity and is long term in nature.

FII is mostly the short term investment mostly in financial market.

FDI enables a degree of control in the company.

FII does not involve in degree of control in the company.

INTERNATIONAL MONETARY FUND ,EXTERNAL COMMERCIAL

BORROWING,ASIAN DEVELOPMENT BANK,IBRD

EXTERNAL COMMERCIAL BORROWING• ECB (External Commercial Borrowings) is an instrument

used in India to facilitate the access to foreign money by Indian corporations and PSUs (Public Sector Undertakings). ECBs include commercial bank loans, buyers' credit, suppliers' credit, securitized instruments such as Floating Rate Notes and Fixed Rate Bonds etc., credit from official export credit agencies and commercial borrowings from the private sector window of Multilateral Financial Institutions 

• External Commercial Borrowings (ECBs) include bank

loans, suppliers' and buyers' credits, fixed and

floating rate bonds (without convertibility) and

borrowings from private sector windows of

multilateral Financial Institutions such as

International Finance Corporation. Euro-issues

include Euro-convertible bonds and GDRs. 

FOREIGN DIRECT INVESTMENT-

• An outward-bound FDI is backed by the government against all types of associated risks. This form of FDI is subject to tax incentives as well as disincentives of various forms.

• Different economic factors encourage inward FDIs. These include interest loans, tax breaks, grants, subsidies, and the removal of restrictions and limitations.

FOREIGN PORTFOLIO INVESTMENT-

• Foreign portfolio investment is the entry of funds into a country where foreigners make purchases in the country’s stock and bond markets, sometimes for speculation.

• It is a usually short term investment (sometimes less than a year, or with involvement in the management of the company), as opposed to the longer term Foreign Direct Investment partnership (possibly through joint venture), involving transfer of technology and "know-how".

FOREIGN VENTURE CAPITAL INVESTOR:-

• FVCIs (Foreign Venture Capital Investors) registered with SEBI are allowed to invest in units of venture capital funds any limit. FVCI investment in equity of Indian venture capital

• undertakings is also allowed. The limit for such investments would be based on the sectoral limits under the FDI policy

INVESTMENT BY NRIs IN IMMOVABLE PROPERTIES:

The NRIs are permitted to freely acquire immoveable property (other than agricultural land, plantations and farmhouses). There are no restrictions regarding the number of such properties to be acquired. The only restriction is that where the property is acquired out of inward remittances, the repatriation is restricted to principal amount for two residential properties. There is no such restriction in respect of commercial property. NRIs are also permitted to avail of housing loans for acquiring property in India and repayment of such loans by close relatives is also permitted.

MULTILATERAL FINANCIAL INSTITUTION

1.IBRD-

WORLD BANK : SHORT INTRODUCTION

NAME : WORLD BANK H.Q. : WASHINGTON D.C. ESTD. : 27 DEC 1945 MEMBERS : 185 COUNTRIES CURRENT PRESIDENT : ROBERT B. ZOELLICK. STAFF : 10000 IN 100 COUNRIES AUTHORIZED CAPITAL : $184 BILLION FINANCIAL SOURCES : BORROWING ON INTERNATIONAL MARKET

WORKING GROUPS OF WORLD BANK

International Bank for Reconstruction and Development (IBRD)International Development Association (IDA)International Finance Corporation (IFC)Multilateral Investment Guarantee Agency (MIGA)International Centre for Settlement of Investment Disputes (ICSID)

FUNCTIONS

• World Bank provides technical and financial assistance to underdeveloped nations for development schemes like building roads, schools, hospitals, etc. The main aim is to eliminate poverty from the world.

• The World Bank collaborates with numerous other partners and multilateral organizations, including the World Health Organization (WHO) and the Food and Agriculture Organization (FAO), to realize the most far-reaching results possible.

2. ASIAN DEVELOPMENT BANK:-

The Asian Development Bank (ADB) is a multilateral development finance institution whose mission is to reduce poverty in the Asia Pacific region.

The ADB was founded in 1966 with the goal of eradicating poverty in the region. With over 1.9 billion people living on less than $2 a day in Asia, the institution has a formidable challenge. 

FUNCTIONS

• It plays the following functions for countries in the Asia Pacific region:

• Provides loans and equity investments to its developing member countries (DMCs)

• Provides technical assistance for the planning and execution of development projects and programs and for advisory services

• Promotes and facilitates investment of public and private capital for development

3.INTERNAIONAL MONETARY FUND (IMF):-

• The International Monetary Fund was conceived in July 1944. The International Monetary Fund (IMF) is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

WHAT IS DEPOSITORY RECEIPTS ?

A DR is a type of negotiable (transferable) financial security traded on a local stock exchange but represents a security, usually in the form of equity, issued by a foreign, publicly-listed company. The DR, which is a physical certificate, allows investors to hold shares in equity of other countries.

The other most common type of DRs are European DRs and International DRs. ADRs are typically traded on a US national stock exchange, such as the New York Stock Exchange (NYSE) or the American Stock Exchange, while GDRs are commonly listed on European stock exchanges such as the London Stock Exchange. Both ADRs and GDRs are usually denominated in US dollars, but can also be denominated in Euros.

The Depository Receipts may be traded freely on an exchange or an over the counter market.

INDIAN DEPOSITORY RECEIPTSIDRs are transferable securities to be listed on Indian stock exchanges in the form of depository receipts created by a Domestic Depository in India against the underlying equity shares of the issuing company which is incorporated outside India.

HOW DO DRs WORK ?DRs are created when a foreign company wishes to list its securities on another country’s stock exchange. For this, the issuing company has to fulfill the listing criteria for DRs in the other country. Before creating DRs, the shares of the foreign company, which the DRs represent, are delivered and deposited with the custodian bank of the depository creating the DR. Once the custodial bank receives the delivery of shares, the depository creates and issues the DR to investors in the country where the DRs are listed. These DRs are then listed and traded in the local stock exchanges of the other country.

PARTIES INVOLVED IN DEPOSITOR RECEIPTS

DEPOSITORY RECEIPTS

ISSUER COMPANY

INVESTOR RELATION

FIRM

DEPOSITORY

CO-MANAGERS

CUSTODIAN

LEGAL ADVISOR

AUDITORS

Each of the above parties have various roles to play and must coordinate with each other effectively to ensure that the DR issue

process is carried out successfully

Issuer Depository

At the time of offering… Prepare documentation working

with advisors Interact with listing authority and

respond to all questions IR/ PR targeted programOngoing… Provide depositary and custodian

with notices of dividends, rights offerings and other corporate actions, including meeting notices

Ongoing compliance with stock exchange and international regulations, including disclosure and reporting

Execute internationally-focused investor relations plan

Keeps market informed of developments through PRs

Regular meetings with institutional investors holding company DRs

At the time of offering… Provide advice/ perspective on type of

program, exchange or market on which to list or quote and advise on DR ratio

Appoint custodian Coordinate with all parties for timely

launch Coordinate with legal counsel on

Deposit Agreement and securities law

matters, as appropriate Announce DR program to marketOngoing… Coordinate with issuer to announce

and process corporate actions such as dividends and shareholders’ meetings

Work with Issuer to maintain active DR program

CONT.Legal Counsel

At the time of offering… Prepare (issuer counsel) and/or

review (depositary counsel) offering circular and interact with authorities

Prepare draft deposit agreement (depositary bank’s counsel)

Submit requisite documents to local regulatory authorities and exchanges (issuer and placement agent counsels)

Ongoing… Manage compliance with

securities laws, rules and regulations and perfect any securities law exemptions

Provide corporate action support, whenever required

At the time of offering… Advise on size, pricing and

marketing of offering, type of program to launch and exchange or market on which to list or quote, and ratio of depositary shares to ordinary shares

Act as placement agent or underwriter in offering

Conduct road shows with management/ introduce issuer to institutional and other investors

Line up selected dealers and co-underwriters

Ongoing… Cover issuer through research

reports/ promote DRs to investors Advise on road shows, invest or

meetings, investors to target

I-Banks / Underwriters

CONT..Custodian

At the time of offering… Receive local shares in issuer’s

home country and confirm receiptOngoing… Hold shares in custody for the

account of depositary Receive and deliver shares in

accordance with depositary’s instructions

Auditors

At the time of offering… Prepare company’s accounts for

insertion into the prospectus Review prospectus and interact with

authoritiesOngoing… Audit and prepare accounts

Investor Relation Firm

At the time of offering… Develop long-term plan to raise

awareness of issuer’s program in markets in which GDRs will trade

Develop communications plan and information materials for launch activities (road show and presentations to investors, launch day promotion, meetings with financial media)

Ongoing… Coordinate with issuer’s

advertising and public relations teams on specific program plans to support and develop company image

Continue to work with the issuer to maintain visibility and invest or knowledge in the capital markets

Arrange regular meetings for issuer with investors to keep them informed of developments/ results

DR ISSUANCE PROCESS• Investor contacts broker and requests the

purchase of shares of a DR issuer company. If existing DRs of that company are not available, the issuance process begins.

• To issue new DRs, the broker contacts a local broker in the issuer’s home market.

• The local broker purchases ordinary shares on an exchange in the local market.

• Ordinary shares are deposited with a local custodian.

• The local custodian instructs the depositary to issue DRs that represent the shares received.

• The depositary issues DRs and delivers them in physical form or book entry form.

• The broker delivers DRs to the investor or credits the investor’s account.

DR Broker

Depository

Local Broker

Local Custodian

Investor

17

2

3

4

5

6 Local Stock Market

DR CANCELLATION PROCESS• The investor instructs the broker to

cancel DRs.

• The broker delivers the DRs to the depositary for cancellation.

• The depositary cancels the DRs and instructs the local custodian to release and deliver the underlying shares to the seller’s broker in the issuer’s home market.

• The local custodian delivers the underlying ordinary shares as instructed to the local broker. The local broker safe keeps the ordinary shares or delivers them to or on behalf of the new investor.

DR Broker

Local Broker

Depository

Local Custodian

Investor

2

3

4

1

STRUCTURE OF DR MECHANISM

India underlying shares

OVERSEAS LISTED

MONEY DIVIDEND CLEARING HOUSE

ISSUER COMPANY

CUSTODIAN

DEPOSITORYEUROPEAN or U.S.STOCK EXCHANGE

OVERSEAS INVESTORS

EUROCLEAR/CEDEL/DEPOSITORY TRUST

COMPANY

BENEFITS OF DEPOSITORY RECEIPTS

BENEFITS OF DEPOSITORY RECEIPTS

Benefits to Issuer

Offer a new avenue for raising equity capital outside the issuer’s home market

Broaden and diversify a company’s investor base

Establish/increase total global issuer liquidity by attracting new investors

Enhance a company’s visibility, status and profile internationally among institutional

investors

Develop and/or increase research coverage outside the home market

Get an international valuation as the Company is valued alongside its peer group

Adjust share price levels to those of peers through DR Ratio

Facilitate M&A activity through use as acquisition currency

Expand opportunity to increase local share price as a result of global demand/trading

BENEFITS OF DEPOSITORY RECEIPTS----CONTD…

BENEFITS OF DEPOSITORY RECEIPTS----CONTD…

Benefits to Investors

Facilitate diversification into securities of foreign issuers

Represent a way to provide international exposure for institutional investors (mutual

funds, pension funds) despite restrictions against investing in certain countries or in

foreign investment instruments

Easier to purchase and to hold than the issuer’s underlying ordinary shares

Trade easily and conveniently in US dollars and settle through established

clearinghouses

Ability to acquire the underlying securities directly upon cancellation (two-way

fungibility)

Create accessibility of price, trading information and research

Provide dividend payments in US dollars and corporate action (meetings of

shareholders, rights offerings, exchange offers, tender offers, etc.) notifications in

English

STATUTORY APPROVALS

TATU

TO

RY

APPR

OVA

LFIPB

DEPATMENT OF ECONOMIC AFFAIRS,MINISTRY OF

FINANCE,GOI

DEPARTMENT OF COMPANY AFFAIRS

RBI

SEBI

OTTHER APPROVAL

EURO ISSUESA scheme has been initiated during 1992 to allow the Indian Corporate Sector to have access to the Global Capital markets through issue of Foreign Currency Convertible Bonds (FCCBs)/Equity Shares under the Global Depository Mechanism. Under this scheme, companies with consistent track record of good performance (financial or otherwise) for minimum period of three years can have access to international capital market.

The three year track record requirement has been relaxed for companies making Euro issues for financing projects in the infrastructure sector like power generation, telecommunication, petroleum exploration and refining, ports, airports and roads. Indian corporates have successfully launched 91 Euro issues in the international market.

FINANCIAL INSTRUMENTS

• EURO CREDITS OR EUROLOANS

• EURODEPOSITS

• FOREIGN BONDS

• EUROBONDS

• EURO COMMERCIAL PAPER

• EURO CERTIFICATE OF DEPOSITS

• EURO DOLLARS

• NOTE ISSUANCE FACILITY

• FLOATING RATE NOTES

EURO CREDIT

• These are the loans by banks in international markets. Credit extended in a currency outside the jurisdiction of the central bank of the bank extending the credit.

• For example, an American bank may make a loan denominated in Japanese yen. The term has nothing to do with the euro ; and the prefix "euro-" is used more generally to refer to deposits outside the jurisdiction of the local central bank. e.g. "euro ruble."

• Euro credit loans are usually large and long-term.

• They have emerged as an important source of external finance for many borrowers.

EURO BOND

A bond that is • Underwritten by an international syndicate, • issued simultaneously to investors in a number of countries, and • issued outside the jurisdiction of any single country. Eurobonds are often bearer ,unsecured bonds & they are usually listed on London or Luxemburg exchange. These bonds give the lenders the right to request repayment in one or two or more currencies.

Types are-• Euro callable bonds, euro-convertible bonds, fixed-rate bonds, floating rate bonds.

Eurobonds are named after the currency they are denominated in. For example, Euro yen and Eurodollar bonds are denominated in Japanese yen and American dollars respectively

FLOATING RATE NOTES

• Floating rate notes (FRNs) are bonds that have a variable coupon, equal to a money market reference rate, like LIBOR or federal funds rate, plus a spread. The spread is a rate that remains constant. Almost all FRNs have quarterly coupons, i.e. they pay out interest every three months, though counter examples do exist.

• These protect investors against a rise in interest rates (which have an inverse relationship with bond prices), but also carry lower yields than fixed notes of the same maturity. 

FOREIGN BOND• A bond that is issued in a domestic market by a foreign entity, in the domestic market's currency.

• They are also bearer, unsecured bonds & listed on the domestic exchanges.

• Foreign bonds are regulated by the domestic market authorities .

• Maturity of five years.

Since investors in foreign bonds are usually the residents of the domestic country, investors find them attractive because they can add foreign content to their portfolios without the added exchange rate exposure.

Types of foreign bonds include bulldog bonds, yankee bonds, and samurai bonds.

NOTE ISSUANCE FACILITY

• It is a funding arrangement which combines the features of a syndicated bank loan & a FRN issue.it aims at simultaneously satisfying the investor preference for short term commitments, & the borrower need for medium-term funds.

• The user of NIF obtains medium-term funding by offering short-term notes called euro notes directly to the investors.

• Note issuance facilities are useful in reducing risk and costs for both the borrower and the lender.

EURO DEPOSITS

• The equivalent of a money market rate on cash deposits made in the euro currency.

• Euro deposit rates will usually be quoted as "money market euro deposit rates" and are typically only offered to U.S. investors with minimum investments of greater than 10,000 euros.

• Euro deposits pay a floating interest rate (like a money market account) and offer the chance for capital appreciation if the euro appreciates against the investor's home currency.

• Euro deposit rates are based on the euro interbank offer rate, which is set by the European Central Bank.

EURO DOLLARS

Eurodollars are deposits denominated in U.S. dollars at banks outside the United States, and thus are not under the jurisdiction of the Federal Reserve. Consequently, such deposits are subject to much less regulation than similar deposits within the U.S., allowing for higher margins.

EURO COMMERCIAL PAPER• An unsecured, short-term loan issued by a bank or corporation in the international money market, denominated in a currency that differs from the corporation's domestic currency.

• Like other commercial papers, euro commercial papers are rarely for a term longer than a few months and they are usually issued at a discount.

• Corporations issue euro commercial papers in order to tap into the international money markets for their financing

For example, if a U.S. corporation issues a short-term bond denominated in Canadian dollars to finance its inventory through the international money market, it has issued euro commercial paper.

EURO CDs

• Euro CDs are issued outside a country but are denominated in that country's currency.

• They are subject to the regulations of the country in which they are issued. For this reason, Euro CDs have historically offered slightly higher yields.

• London is the main issuing Centre.• One can purchase euro certificates of deposit (CD) from a bank. However, if purchase a euro CD from a bank outside the United States, the U.S. Federal Deposit Insurance Corporation (FDIC) does not protect it.

GDR’S/ADR’S

Definition:

A GDR/ADR means any instrument in the form of depository receipt or certificate created by a depositor outside India and issued to non-resident investors against the issue of ordinary shares of the company.

The issue of GDR’s/ADR’s are governed by the provisions of the issue of foreign currency convertible bonds and ordinary shares scheme 1993.

Features 1. Track record: The issuer company seeking permission for

raising foreign funds by issue of GDR’s/ADR’s would be required to have a consistent track record of good performance for a period of at least 3 years.

2. GDS’s/ADS’s: A GSR or ADR may evidence 1 or more global depository shares or american depository shares respectively and each gds or ads represents one underlying share of the issuer company.

3. Underlying shares: These shares are issued by the issuer company to the depository, in whose name the shares are registered.

4. Dnomination: GDR’s/ADR’s are denominated in dollars or in some other freely convertible foreign currency and gives holder the right to get equity shares of the issuer company against the GDR/ADR as per the terms of the offer.

5. Listing: Issued abroad and is listed and traded on a foreign stock exchange.

6. Settlement: Usually settled on a book entry basis through the system of Euroclear or Cedel in Europe and the depository trust company in the U.S.

7. Lock-In: No lock-in period.

8. Voting: GDR/ADR holders are not entitled to any voting rights.

9. Transfer: GDR’s/ADR’s may be purchased, possessed and are freely transferable by the non-resident.

10. Redemption and sale: Holder has an option to redeem the GDR’s/ADR’s into the equity shares underlying it.

11. Listing of underlying shares: once redemption takes place the underlying shares are listed and traded on a domestic stock exchange.

Advantages to the investors

• Designated in foreign currency which is more acceptable to global investors.

• Holders need not be registered with SEBI.• Identity of holders is kept confidential since they are freely transferable.

• Quick settlement of GDR’s/ADR’s due to existence of international systems like, Euroclear and cedel in Europe and the depository trust company in U.S.

Advantages to the issuer company

• Issuer co. collects the issue proceeds in foreign currency and is thus able to utilize the same for meeting the foreign exchange component of project cost, repayment of foreign currency loans, etc.

• Large amounts can be raised in the global market.• The issue proceeds may be retained outside India and used for “approved end-uses” as and when the issuer co. requires.

• Dividend payable by the issuer company is in rupees only.

• Possible for the issuer company to float more than one foreign equity issue in a year.

• There is certainty of raising new capital and the issue terms are much better than those which can be obtained in the local market.

• Owing to the restrictive voting rights in the depository agreement, control is not affected immediately.

• Issuer co. can use up to 25% of the total sale proceeds for general corporate restructuring, including working capital requirements.

• Banks, financial institutions, and non banking finance company can raise funds through equity issues abroad and use such funds for domestic lending.

• Issuer co. may retain the GDR/ADR proceeds abroad or remit the funds into India in anticipation of the use of funds for “approved end-uses”.

• Issuer co. making a GDR/ADR issue to fund export projects or infrastructure projects need not to have past track record of financial services.

Main agreements to be executed and related

documents• Prospectus • Subscription agreement between the investors and the

underwriters.• Underwriting agreements between the issuer company

and the underwriters\custodian agreement between the depository and the custodian.

• Depository agreement between the issuer company and the depository.

• Listing agreement with the overseas stock exchange filed by the issuer company

• Domestic listing agreement filed by the issuer company• Lock up agreement

Procedural requirements for a GDR/ADR issue

U.S. generally accepted accounting principles(GAAP):

Companies planning an issue of securities in the U.S. would have t ensure that their accounts for the past three yeas are reconciled with U.S. GAAP.

Preliminary meeting: The issuer company generally holds preliminary discussions and meets with different global merchant/investment bankers, legal advisors, auditors, printers and other intermediaries before deciding to float a GDR/ADR issue.

Authorization by the board of directors: The issuer company is required to pass a board resolution approving the proposed GDR/ADR issue.

Organizational meetings: The issuer company formally appoints the lead manager,

co-managers, underwriters to market the issue organize the road shows, printers, legal advisors, depository, the custodian and the overseas bankers only after the application is filed with the Government of India, ministry of finance, department of economic affairs.

Legal and accounting due diligence on the issuer company

Authorization by the shareholdersStatutory approvalsApplication for listing the additional shares on an Indian stock exchange

Filings

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