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Listing relief for unlisted firms

New Delhi, April 1: The government has eased the listing norms for unlisted companies which are not making profit but have raised money from overseas markets through foreign currency convertible bonds (FCCBs), American depository receipts (ADRs) or global depository receipts (GDRs).

In order to align its guidelines on ADR/GDR with those of Sebi’s on domestic capital issues, the government had amended its 1998 guidelines in August last year.

The amended norms stipulate that unlisted companies, which had issued GDRs/FCCBs in the international market, will be required to list on the domestic market on making profit beginning financial year 2005-06 or within three years of such issue of GDRs/FCCBs, whichever is earlier.

However, industry associations had made representations to the government seeking exemption from listing requirement for unlisted companies that had issued GDRs/FCCBs under previous guidelines.

“The requests (of the industry) have been examined and the government has decided that unlisted companies which had raised money from overseas markets by issuing FCCBs, ADR/GDRs according to the guidelines of 1998, but are not yet making profit, be permitted to comply with the listing norms on domestic stock exchanges within three years of having started making profit,” an official statement said.

However, no fresh issue of FCCBs, ADR/GDRs by such companies will be permitted without listing first on domestic exchanges.

All other conditions, including the eligibility of the issuer and eligibility of the subscriber, will continue to be applicable to all companies.

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