<p>The government today modified FDI policy allowing unlisted companies to directly list on stock exchanges abroad to raise funds for acquisitions or retiring overseas debts, a move which may help India in containing high current account deficit.<br /><br /></p>.<p>As of now, unlisted companies are not allowed to directly list in overseas markets without prior or subsequent listing in Indian markets.<br /><br />"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...," the Department of Industrial Policy and Promotion (DIPP) said.<br /><br />Necessary changes have been made in the 'Consolidated FDI Policy' in this regard.<br /><br />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.<br /><br />"The capital raised abroad may be utilised for retiring outstanding overseas debt or for operations abroad including for acquisitions," the revised FDI policy said.<br /><br />In case the funds raised are not utilised abroad, it said, the company should repatriate the funds to India within 15 days and park it with a scheduled bank and "may be used domestically".<br /><br />While raising funds abroad, the listing companies would have to be fully compliant with the FDI policy.<br /><br />The Reserve Bank has already issued a notification in this regard.<br /><br />The listing company would also have to comply with the instructions on downstream investment and the criteria of eligibility of who can raise funds through ADRs/GDRs would be as prescribed by the government.<br /><br />The scheme will be implemented on a pilot basis for a period of two years.<br /><br />The government aims to bring down the CAD to below USD 56 billion this fiscal, as against USD 88.2 billion in the last financial year.<br /><br />Rupee value versus US dollar has been affected severely because of high CAD and other global factors.<br /><br />RBI has said that ADRs/ GDRs should be issued subject to sectoral cap, entry route, minimum capitalisation norms and pricing norms as applicable as per FDI regulations.<br /><br />The pricing of such ADRs/GDRs to be issued to a person resident outside India would determined in accordance with the FEMA norms, it added.</p>
<p>The government today modified FDI policy allowing unlisted companies to directly list on stock exchanges abroad to raise funds for acquisitions or retiring overseas debts, a move which may help India in containing high current account deficit.<br /><br /></p>.<p>As of now, unlisted companies are not allowed to directly list in overseas markets without prior or subsequent listing in Indian markets.<br /><br />"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...," the Department of Industrial Policy and Promotion (DIPP) said.<br /><br />Necessary changes have been made in the 'Consolidated FDI Policy' in this regard.<br /><br />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.<br /><br />"The capital raised abroad may be utilised for retiring outstanding overseas debt or for operations abroad including for acquisitions," the revised FDI policy said.<br /><br />In case the funds raised are not utilised abroad, it said, the company should repatriate the funds to India within 15 days and park it with a scheduled bank and "may be used domestically".<br /><br />While raising funds abroad, the listing companies would have to be fully compliant with the FDI policy.<br /><br />The Reserve Bank has already issued a notification in this regard.<br /><br />The listing company would also have to comply with the instructions on downstream investment and the criteria of eligibility of who can raise funds through ADRs/GDRs would be as prescribed by the government.<br /><br />The scheme will be implemented on a pilot basis for a period of two years.<br /><br />The government aims to bring down the CAD to below USD 56 billion this fiscal, as against USD 88.2 billion in the last financial year.<br /><br />Rupee value versus US dollar has been affected severely because of high CAD and other global factors.<br /><br />RBI has said that ADRs/ GDRs should be issued subject to sectoral cap, entry route, minimum capitalisation norms and pricing norms as applicable as per FDI regulations.<br /><br />The pricing of such ADRs/GDRs to be issued to a person resident outside India would determined in accordance with the FEMA norms, it added.</p>