INTERNATIONAL OFFERINGS
Today, Indian companies are looking overseas for raising equity capital and debt funds. Global Depository Receipts ("GDRs") traded on the London Stock Exchange or the Luxembourg Stock Exchange was extremely popular in the first half of the last decade. However, in the recent years, with the boom in the Information Technology sector the market for American Depository Receipts ("ADRs") has picked up. Infosys Technologies was the first Indian company to list on NASDAQ, in 1999, in which transaction we represented the underwriters, Nationsbanc Montgomery (now Bank of America Securities, LLC). Since then, several Indian companies have tapped the U.S. capital markets. There is also a growing appetite for debt-linked instruments such as Foreign Currency Convertible Bonds ("FCCBs") and convertible debentures amongst foreign investors as these instruments provid foreign investors the flexibility to exit or convert the instrument into equity, depending on the valuations. The most recent development that we witnessed is the introduction of the concept of "Indian Depository Receipts" ("IDRs") by the Ministry of Finance of the Government of India which deals with mechanism of foreign companies listing on the Indian Stock Exchanges. The draft guidelines for the issue of IDRs are in the process of being finalized by the Government of India.
Our practice in the arena of international offerings focuses on:
- Advising our clients on all aspects of making a public offer in an international or a non-local market. Our advice encompasses the Indian exchange control regulations, and the applicable guidelines issued from time to time by the various Indian authorities such as the Ministry of Finance and the Reserve Bank of India
- Drafting the requisite documents for the ADR/GDR/IDR issue. In drafting these documents, we take into cognizance the requirements under various relevant Indian laws, guidelines and regulations and the requirements of the underwriters and overseas stock exchange
- Conducting a legal due diligence exercise in the context of the disclosure to be made by the issuer in the registration statement/prospectus
- Assisting the issuer company to comply with all overseas listing requirements by co-coordinating with the foreign counsel and also by resolving conflicts if any, between Indian company law requirements and the listing requirements of the overseas exchange
- Advising our clients on issues relating to the raising of debt capital including the Indian regulatory approvals required, the restrictions on the payment of interest to foreign investors and the tax related issues
- Advising clients who wish to raise foreign capital using a combination of the FCCB and GDR instruments
Our research papers / articles:
Other allied material:
Contact Details: For further information
and / or suggestions, please contact Siddharth Shah
Email: siddharth@nishithdesai.com
