Relevance: Prelims: Economy
Why in news?
- The Cabinet approved a proposal to allow direct listing of Indian companies overseas.
About:
- Amendment would be made in the Companies Act, 2013, for having enabling provisions that would permit foreign listing of Indian corporates.
- Currently, quite a few Indian companies have American Depository Receipts (ADRs) that are traded in the US. Some other corporates have their Global Depository Receipts (GDRs).
- Apart from providing an additional fund raising avenue for the corporates looking to expand and boost their business activities, overseas listing of shares would also help in bringing more capital into the country.
- According to the corporate affairs ministry, amendment would be carried out in Section 23 of the Act to include enabling provisions to allow direct listing of securities by Indian public companies in permissible foreign jurisdictions.
- Under the Act, public companies should have at least seven shareholders and have no restriction on transferability of their shares, among other criteria.
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