SEBI panel to study option of direct overseas listings

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The Securities and Exchange Board of India (SEBI) has constituted an expert committee to examine the possibility of allowing unlisted Indian companies to directly list equity overseas while also allowing foreign companies to list directly on the Indian bourses.


  • “Considering the evolution and internationalisation of the capital markets, it would be worthwhile to consider facilitating companies incorporated in India to directly list their equity share capital abroad and vice versa,”
  • The nine-member panel will include Ranu Vohra, MD & CEO, Avendus Capital, Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas, Kamal Yadav, MD, Morgan Stanley, S Ramesh, MD & CEO, Kotak Investment Banking, Deep Kalra, Chairman, and Jamil Khatri of KPMG.
  • Currently, Indian firms can only use the depository receipts route — American Depository Receipt (ADR) or Global Depository Receipt (GDR) — to list on overseas exchanges. For foreign companies wanting to list on Indian exchanges, the Indian Depository Receipt (IDR) is the only option currently.
  • “Companies incorporated in India can today list their debt securities on international exchanges (masala bonds) but their equity share capital can be listed abroad only through the ADR/GDR route.
  • Similarly, companies incorporated outside India can access the Indian capital markets only through the IDR route,”

Global Depositary Receipt – GDR

  • A global depositary receipt (GDR) is a bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares but are offered for sale globally through the various bank branches. A GDR is a financial instrument used by private markets to raise capital denominated in either U.S. dollars or euros.
  • GDRs may be traded in multiple markets, generally referred to as capital markets, as they are considered to be negotiable certificates. Capital markets are used to facilitate the trade of long-term debt instruments, primarily for the purpose of generating capital. GDR transactions in the international market tend to have lower associated costs than some other mechanisms that can be used to trade in foreign securities.

Masala Bonds

  • “Masala Bonds” are the 10 year off-shore rupee bonds issued by International Finance Corporation (IFC), a member of the World Bank group, in the international capital market in November 2014, to raise funds for supporting private sector infrastructure development initiatives in India.
  • Masala bonds are listed in London Stock Exchange.
  • Subsequently, on 29 September 2015, RBI put in place a framework for issuance of Rupee denominated bonds overseas within the overarching External Commercial Borrowing (ECB) policy, in order to facilitate Rupee denominated borrowing from overseas.
  • The term Masala bonds now extends to any rupee denominated bonds issued to overseas buyers even though RBI has not resorted to the use of this name in their guidelines.
  • The term “masala” stands for Indian spices, which gives Indian cuisine its characteristic flavour, and helped India gain a place in the global trade map.
  • Masala Bonds are similar to dimsum bonds -bonds issued outside China but denominated in Chinese currency. But they are different from samurai bonds which are Yen (Japanese currency)-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.


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