Come, list on Indian exchanges, India tells American cos as Modi begins US visit

New York: As Prime Minister Narendra Modi begins his first ever US visit, India today made a pitch for listing by American and other foreign companies on Indian exchanges under the newly proposed Bharat Depository Receipts.

Addressing an India Investor Round Table here, Chairman of the government committee on Depository Receipts M S Sahoo said that the new regime would be complementary to the existing ADR or American Depository Receipt regime under which Indian companies get listed on the US stock exchanges.

He said that necessary measures would be provided in the new regime to ensure that the route is not misused and the investors’ interest is safeguarded at all the time.

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Sahoo, a former whole-time member of Indian capital markets regulator Sebi, has played a key role in designing major reforms in the Indian markets.

Speaking at the round table organised by the Bank of New York Mellon and BSE here, Sahoo also said that a friendly tax structure needs to be put in place for the new regime.

Sahoo-headed panel proposed ‘Bharat Depository Receipts’ (BhDRs)’, a rupee dominated instrument that would be issued by
domestic depository against listed equities or other financial assets of a foreign company.

The panel, in its report to the Finance Ministry earlier this year, had suggested that laws and regulations relating to markets and Indian institutional investors must be modified to ensure that there is a level playing field between an Indian
security and a DR. “… a complete suite of BhDRs should be allowed to be issued and traded in India to make the Indian financial system more competitive, and to provide greater choice to Indian investors,” the report had said.

Another suggestion was that the Indian market should allow trading of DRs issued or listed elsewhere, in addition to BhDRs. “Both Indian - retail and institutional - as well as foreign investors should be allowed to invest in BhDRs,” it had said.

PTI