At present, Indian companies issue American depository receipts (ADR) and global depository receipts (GDR) to foreign investors against underlying value of shares.
Although the scheme was announced by Finance Minister P Chidambaram in his interim budget, the government requires Election Commission's permission to launch it as the model code of conduct is in force.
"The Finance Ministry has finalised the proposal related to widening the scope for issuance of foreign-listed securities by Indian firms against debt and sent it to EC for its clearance," a senior Finance Ministry official said.
In order to make ADR/GDR more attractive, the government is also proposing to extend voting rights to holder of such securities.
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While ADRs are traded on the US stock markets like New York Stock Exchange and Nasdaq, GDR are listed on stock exchanges in other parts of the globe. These instruments are usually denominated in foreign currency.
Reliance Industries and Grasim Industries were the first Indian companies which accessed foreign equity market by issuing ADRs in 1992.
In the interim Budget speech, Finance Minister P Chidambaram had said the government would "comprehensively revamp the American depository receipt and global depository receipt scheme and enlarge the scope of depository receipts".
Besides, the government would take a number of steps to energise and deepen the country's corporate bond as well as currency derivatives market, the Minister had said.
The proposed initiatives are primarily meant for attracting retail and high networth investors towards this segment and are aimed at helping India Inc raise long-term funds in a cost-effective manner from overseas markets.