The Ministry of Finance has issued a Press Release dated 27 September, 2013 dealing with listing of Unlisted Indian Companies on overseas exchanges. Currently, unlisted Indian companies are not allowed to list on overseas Stock Exchanges. As per the Press Release, it has now been decided that unlisted companies may be allowed to raise capital abroad without the requirement of prior or simultaneous listing in India.

1. LISTING OF UNLISTED
COMPANIES OUTSIDE INDIA

2. Applicable Law Consolidated FDI Policy, 2013
 As per the applicable law, for raising capital in
the International market Companies required
prior or simultaneous listing in the domestic
market.
 Unlisted companies, which have already
issued securities by way of Foreign Currency
Convertible Bonds (FCCB) or Depository
Receipts (ADR/GDR) in international market,
have to be listed in the domestic market on
making profit or within three years of such
issue of such securities, whichever is earlier.
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3. Salient Features of the Press
Release
 As per a Press Release dated September 27,
2013, the Ministry of Finance decided that
companies may be allowed to raise capital
abroad without the requirement of prior or
simultaneous listing in India.
 The above rule is subject to the issuance of
notification by MOF, DIPP and RBI.
 The Scheme will be implemented on a pilot
basis for a period of two years from the date
of notification of the scheme.
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4. Conditions to be fulfilled prior to
the approval
 Unlisted companies may be allowed to list
abroad only on exchanges in IOSCO/FATF
compliant jurisdictions or those jurisdictions
with which SEBI has signed bilateral
agreements.
 The Companies shall file a copy of the return,
which they will submit to the proposed
exchange/regulators and to the SEBI for the
purpose of Prevention of Money Laundering
Act, 2002 (PMLA).
 They shall comply with SEBI’s disclosure
requirements in addition to that of the primary
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exchange prior to the listing abroad.

5.  While raising resources abroad, the listing
company shall be fully compliant with the FDI
Policy in force;
 The capital raised abroad may be utilised for
retiring outstanding overseas debt or for
operations abroad including for acquisitions;
 In case the funds raised are not utilised
abroad as stipulated above, such companies
shall remit the money back to India within 15
days and such money shall be parked only in
AD category banks recognised by RBI.
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6. Strategic benefits for Overseas
Listing
 Access to new and incredibly deep capital.
 Economical option vis-a-vis PE or Debt Funding.
 Brand building and wide media coverage
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(especially internet companies).
Additional visibility, exposure and prestige.
Benefits to employees.
New growth opportunities and better access to
technologies.
Surreal spike in valuation and under-pricing
Increased liquidity and broad investor base
Lowered cost of capital
Enhanced protection to investors
Dollar as currency for acquisition and will give
impetus to easy exit
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7. Benefits to Government and
Economy
 This would in a way help the Government to
overcome the present Current Account Deficit
(CAD).
 Increase dollar inflows in India, as 15 days is
pretty less time for Companies to utilize the
capital raised abroad by funding projects and
acquisitions.
 Increase in foreign exchange reserves of the
country.
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8. THANK YOU
www.lexplore.in
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