A Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme was notified in 1993 to allow the Indian Corporate sector to access global capital markets through issue of Foreign Currency Convertible Bonds (FCCB)/Equity Shares under the Global Depository Receipt Mechanism (GDR) and American Depository Receipt Mechanism (ADR). The Scheme has been amended several times since then.
In order to bring the ADR/GDR/FCCB guidelines in alignment with SEBI's guidelines on domestic capital issues, Government, vide Press Note No. 15/4/2004-NRI dated August 31, 2005, amended the pricing norms for Indian listed companies issuing ADR/GDR/FCCB. The present pricing norm, thus, reads as under:
"Clause 5 (4)(D) The issue price - subject to the following :
Listed Companies - The pricing should not be less than the higher of the following two averages :
- The average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the six months preceding the relevant date;
- The average of the weekly high and low of the closing prices of the related shares quoted on a stock exchange during the two week preceding the relevant date.
