The government proposes to impose stringent norms for companies issuing Indian Depository Receipts like a five year profit making record, dividend payment of at least 10 per cent during the period, and a debt equity ratio of at least 2:1.
The draft Companies (Issue of IDRs) Rules, 2002 prepared by the department of company affairs also propose that IDRs, which have to be listed on an Indian stock exchange, cannot be redeemed before one year from the date of issue.
According to norms, if an issuer intends to list the IDR on a foreign bourse, the securities underlying the receipt have to be listed in an international stock exchange. IDRs
