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GRD Issue

CS Milan Mehta (Partner) (41 Points)

05 May 2010

At what stage the In principle approval u/c 24A is to be taken from BSe/NSe for GDR issue (after B.meeting / or after General meeting)

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Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 05 May 2010

Let me tell you my own practice.

Fully complete your application for In-principle approval pending certified true copy of share holders approval. Now you have 2 options:

1. Submit your application for In-principle approval immediately after EGM with shareholders’ resolution.

2. Submit your application for In-principle approval before EGM without shareholders’ resolution. Submit the shareholders’ resolution later after EGM.

Best Regards

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CS Milan Mehta (Partner) (41 Points)
Replied 06 May 2010

Thanks..

Is there any pricing norms for the GDR?

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 06 May 2010

Yes off course pricing norms are there. Allow me to take some time to search the file in my system.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 06 May 2010

The Press Information Bureau is requested to give wide publicity to this Press release.

(Dr. K.P. Krishnan)
Joint Secretary (Capital Markets)

Press Information Officer
Press Information Bureau
Shastri Bhawan,New Delhi

Amendment to the “Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993”

A Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme was notified in 1993 to allow the Indian Corporate sector to access global capital markets through issue of Foreign Currency Convertible Bonds (FCCB)/Equity Shares under the Global Depository Receipt Mechanism (GDR) and American Depository Receipt Mechanism (ADR). The Scheme has been amended several times since then.

2. In order to bring the ADR/GDR/FCCB guidelines in alignment with SEBI’s guidelines on domestic capital issues, Government, vide Press Note No. 15/4/2004-NRI dated August 31, 2005, amended the pricing norms for Indian listed companies issuing ADR/GDR/FCCB. The present pricing norm, thus, reads as under:

“Clause 5 (4)(D) The issue price – subject to the following:

Listed Companies – The pricing should not be less than the higher of the following two averages:

(i) The average of the weekly high and low of the closing prices of the related shares quoted on the stock
exchange during the six months preceding the relevant date;

(ii) The average of the weekly high and low of the closing prices of the related shares quoted on a stock
exchange during the two week preceding the relevant date.

The “relevant date” means the date thirty days prior to the date on which the meeting of the general body of shareholders is held, in terms of section 81 (IA) of the Companies Act, 1956, to consider the proposed issue.”

3. Government has received a number of representations that the extant pricing norms affect corporates adversely in a bearish market. Government also invited comments of the public on the proposal to revis the pricing norms.

4. After a review, it has been decided to amend the pricing norm as follows:

“Clause 5 (4)(D) The issue price – subject to the following:

Listed Companies – The pricing should not be less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the relevant date;

The “relevant date” means date of the meeting in which the Board of the company or the Committee of Directors duly authorized by the Board of the company decides to open the proposed issue.”

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F.No.9/8/2006-ECB New Delhi, dated the 27^th November, 2008

The Press Information Bureau is requested to give wide publicity to this Press Note.

(K.P. Krishnan)
Joint Secretary to the Government of India

Press Information Officer,
Press Information Bureau,
Shastri Bhavan, New Delhi