27 april 2001

two way fungibility for adrs/gdrs
new delhi: the government has finalised the norms for extending two-way fungibility to companies tapping the overseas markets. under the norms, companies will be permitted to maintain the levels of gdrs/adrs without seeking fresh government clearances.
accordingly, companies will be permitted to reissue adrs/gdrs up to the level for which they hold an original clearance without seeking a fresh approval every time a depository-holder divests his holding.
procedurally, the adrs/gdrs have to be converted into shares before they can be divested in the domestic market. every time a conversion takes place, companies have to seek government permission to reissue the depositories.
most companies have been arguing that they should be permitted flexibility in this regard, since a smaller float in the international market leads to thin trading and faulty price realisation.
currently, about 20 indian companies have issued adrs/gdrs and all these companies stand to gain by the relaxation

23 april 2001