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Stiff
entry norms set for Indian Depository Receipts
New Delhi: Companies incorporated outside the country
can now raise resources from the Indian capital market
with the government notifying norms for issue of Indian
Depository Receipts. However, companies would have to
have a pre-issue paid-up capital and free reserves of
at least $100 million and an average turnover of $500
million during the three financial years preceding the
issue. Besides, the issuing company should have been making
profits for at least five years preceding the issue and
should have declared a dividend of not less than 10 per
cent each year for the said period. It should also fulfil
the eligibility criteria laid down by Securities and Exchange
Board of India from time-to-time. Besides, the issuing
company should also have a pre-issue debt equity ratio
of not more than 2:1.
The
norms, notified by the Department of Company Affairs ,
however, make it mandatory for the issuing company to
have an established place of business in India. The rules
also stipulate that IDRs should not be redeemed into underlying
equity shares before the expiry of the one-year period
from the issue date. Further, the IDRs issued by any issuing
company in any financial year should not exceed 15 per
cent of its paid-up capital and free reserves.
IDR means any instrument in the form of depository receipt
created by the domestic depository in India against the
underlying equity shares of the issuing company. This
has been stipulated in the Companies (Issue of Indian
Depository Receipts) Rules, 2004.
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Reliance
Energy: Bonds issue raises $178 m
Mumbai: Power generation and distribution company
Reliance Energy Ltd, formerly BSES, has raised $178 million
(Rs 805 crore) through foreign currency convertible bonds
(FCCB). The zero coupon bonds have a maturity of five
years and will be the largest FCCB placed by an Indian
company.
Investors can convert the bonds into global depository
receipts at Rs 1,007 a share. Conversion price is at a
30 per cent premium to Reliance Energy's share price of
Rs 774.55 per share on the BSE on Monday. The company
also plans to raise Rs 100 crore through equity shares
or an international convertible bond.
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ONGC
public offer: SEBI nod for participatory notes
New Delhi: The Securities and Exchange Board of
India (SEBI) has informed the government that the associates
of book-running lead managers can be allowed to issue
participatory notes for the public offer for sale of 10
per cent equity in ONGC, which is set to open on March
5. However, the government is yet to take a decision in
this regard as it would require the government to lay
down new procedures for issuing participatory notes in
order to comply with the SEBI caveats. SEBI currently
permits fund managers to issue participatory notes but
has barred lead managers from using the instrument whereby
foreign funds not registered in India could participate
in a public offer. A decision along the lines recommended
by SEBI would make the ONGC more attractive for foreign
investors.
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MF
industry collections: Rs 52,000 crore in Apr-Jan '04
Mumbai: The mutual fund industry has clocked a
record accretion of Rs 52,000 crore in the first 10 months
of this financial year, according to the Association of
Mutual Funds in India. Meanwhile the association is hosting
the ninth Asia Oceania regional meeting in New Delhi from
March 3-7, 2004. Representatives of fund associations
and regulators from 12 countries in the Asia- Pacific
region would be attending the meeting.
The conference would review each country's status in areas
of regulation, developments in sales, marketing and distribution.
This year's conference would also discuss in detail the
issues arising from the fall out in the American mutual
fund industry because of later trading. Two new topics
included for discussion are "building investor confidence"
and "cut-off time regulation.
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NSE:
No trading in CDR Medical
Hyderabad: The National Stock Exchange has informed
its member-brokers that it has decided to suspend trading
in the equity shares of the Hyderabad-based CDR Medical
Industries Ltd from March 15. The exchange said it has
taken the decision since the company has failed to respond
to the notice for non-compliance with certain provisions
of the listing agreement.
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IBP
offer price likely at Rs 620
New Delhi: The IBP issue, which closed on Monday,
was oversubscribed 2.8 times with the retail investors
allocated 25 per cent of 57.58 lakh shares offered for
sale. With the retail investors just managing to reach
their level of allocation, all the applicants are likely
to get whatever they have applied for. According to reports,
the Ministry of Disinvestment has favoured a selling price
of Rs 620 per share for investors, with retail investors
getting it at a discount of five per cent.
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