MUMBAI (Reuters) – The Reserve Bank of India (RBI) on Tuesday sought to make it easier for investors to trade shares of foreign companies listed on the domestic stock market.
It said it was allowing limited convertibility of Indian depository receipts (IDRs) into underlying equity shares, and vice versa.
The setting up of IDRs was aimed at encouraging foreign companies to tap the Indian capital markets, but there have been a number of restrictions on convertibility.
Only Standard Chartered Plc (STAN.L) has used the instrument so far.
The RBI said there would be an overall cap of $5 billion for raising of capital by issuance of IDRs by foreign companies.
(Reporting by Shamik Paul. Editing by Jeremy Gaunt.)
