Financial Daily from THE HINDU group of publications
Friday, Jul 30, 2004
Financial Daily from THE HINDU group of publications Friday, Jul 30, 2004 |
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Markets
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Regulatory Bodies & Rulings SEBI issues IDR norms Our Bureau
Mumbai , July 29 COMPANIES proposing to issue Indian Depository Receipts (IDRs) should not have been prohibited to issue securities by the regulatory body applicable to them and should have a good track record with respect to compliance with securities market regulations, mandates the Securities and Exchange Board of India. This is part of SEBI's suggested disclosure requirements for offer documents of companies seeking to issue IDRs. Only Qualified Institutional Buyers and investors who would invest Rs 5 lakh in such issues would be allowed to invest in IDRs.The minimum size of an IDR issue should not be less than Rs 50 crore, SEBI says. Also, if the company does not receive the minimum subscription of 90 per cent of the issued amount on the date of closure of the issue, (or if the subscription level falls below this level after the closure of issue on account of returned cheques, withdrawal of applications etc.) the company should refund the entire subscription amount received. If there is a delay beyond eight days after the company becomes liable to pay the amount, the company will have to pay interest at the rate of 15 per cent per annum for the period of delay, points out the SEBI circular. The offer document for an IDR issue should contain financial details of the company including capital structure, use of proceeds, audited financial statements and details of the securities market of the country of incorporation. Risk factors, forward looking statements, minimum subscription expected, nature of the IDR should also be clearly stated in the offer document, according to the circular.
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