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Finance ministry issues revised guidelines for companies issuing GDRs
New Delhi: As part of the revised guidelines on GDRs/ADRs/FCCBs announced by the Finance Ministry here today, it is now mandatory for unlisted companies that have raised funds from the overseas markets through the Global Domestic Receipts (GDRs) or Foreign Currency Convertible Bonds (FCCBs) route to list on the domestic stock exchanges within a stipulated time frame.

The listing would have to be done within three years of the issuance of GDRs/FCCBs or on making profit in any financial year starting from 2005-06, whichever is earlier.

The amendment to the existing guidelines on GDRs/ADRs/FCCBs aligns them with the Securities and Exchange Board of India's (SEBI) guidelines on domestic capital issues.

For unlisted companies that have not yet accessed the GDR/FCCB route for raising funds overseas, the Finance Ministry has said that such companies would require prior or simultaneous listing in the domestic market while seeking to issue FCCBs/GDRs.

With regard to listed companies, the amended guidelines now stipulate that an Indian company that is not eligible to raise funds from the domestic capital market, including those restrained by SEBI, would not be eligible to issue GDR/FCCBs.

The Finance Ministry has also said that the Reserve Bank of India (RBI) regulations regarding voting rights in the case of banking companies would continue to be applicable to all shareholders exercising voting rights.

Further, the guidelines also stipulate that the Overseas Corporate Bodies that are not eligible to invest in India through the portfolio route and entities prohibited to buy, sell or deal in securities by SEBI would also not be eligible to subscribe to the FCCBs/GDRs issued by Indian listed companies.

As regards pricing of GDRs/FCCBs, the revised guidelines stipulate that the issues should be made at a price not 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 weeks preceding the relevant date.

The `relevant date' would be the date 30 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, for considering the proposed issue.
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SEBI clears corporatisation of the Hyderabad Stock Exchange
Hyderabad: The Securities and Exchange Board of India has approved the scheme for corporatisation and de-mutualisation of the Hyderabad Stock Exchange Ltd (HSEL).

The scheme, inter alia, provides for the re-registration of HSEL as a company limited by shares, segregation of ownership and management from the trading rights of the members, restriction on voting rights of shareholders who are also trading members, composition of the Governing Board etc.

SEBI, having considered the scheme and on being satisfied that it would be in the interest of the trade and also in the public interest okayed it, according to the HSEL
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Titan announces rights issue of Rs.127 crore
Mumbai: Titan Industries, a Tata group company, has announced a rights issue of Rs127-crore to part-finance its expansion plans. The issue consists of partly convertible debentures (PCD) priced at Rs600 each in the ratio of one PCD for every 20 shares held by shareholders.

The PCDs will be in two parts, with Part A being converted into one equity share in a price band of Rs325 to Rs375. Part B will consist of one non-convertible debenture, carrying a coupon rate of 6.75 per cent per annum payable annually and redeemable at the end of five years.

The total issue size will be around Rs126.83 crore comprising over 21.13 lakh PCDs of Rs600 each.

Titan will use the proceeds to part-finance the expansion of its existing businesses. The new business lines that the company may be evaluating may include an entry into new sectors of the precision engineering business and the mass jewellery market.

The company, which posted a sales figure of Rs1,135 crore in 2004-05, is targeting a topline of around Rs4000 crore over the next four years.
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