SEBI's guidelines for Indian Depository Receipts

Mumbai, Apr 4: Securities and Exchange Board of India (SEBI) announced the guidelines for the Indian Depository Receipts (IDR) yesterday.

SEBI has set Rs 50 crore as the lower limit for the IDRs to be issued by the Indian companies. As per the norms, the minimum investment required in the IDR issue has been set at Rs two lakh.

Non-Resident Indians and Foreign Institutional Investors (FIIs) have been restricted from purchasing or possessing IDRs without special permission from the Reserve Bank of India (RBI).

Also, the IDR issuing company should have good track record with respect to securities market regualtions and companies not meeting the criteria will not be allowed to raise funds from the domestic market, SEBI said.

If the IDR issuer fails to receive minimum 90 per cent subscription on the date of closure of the issue, or the subscription level later falls below 90 per cent due to cheques not being honoured or withdrawl of applications, the company has to refund the entire subscription amount received, SEBI said.

Also, in case of delay beyond eight days after the company becomes liable to pay the amount, the company shall pay interest at the rate of 15 per cent per annum for the period of delay.

UNI