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Sponsorship for ADRs

Mumbai, Nov. 24 (PTI): The Reserve Bank of India today said an Indian company may sponsor American\Global Depository receipts (ADR/GDR) with an overseas depository against shares held by its shareholders at a price to be determined by lead manager.

The companies would have to comply with provisions of the Foreign Currency Convertible Bonds and Ordinary Shares (through depository receipt mechanism) Scheme, 1993 and central government guidelines while sponsoring ADR\GDRs, the bank said in a notification to authorised foreign exchange dealers.

The entities would have to comply with guidelines issued in July for using proceeds of ADR\GDRs, including utilisation in the first stage acquisition of shares in the disinvestment process and the mandatory second stage public offer for strategic reasons, it said.

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