Unlisted firms can raise funds abroad

New Delhi: The government on Friday modified FDI policy allowing unlisted companies to directly list on stock exchanges abroad to raise funds for acquisitions or retiring overseas debts, a move which may help India in containing high current account deficit.

As of now, unlisted companies are not allowed to directly list in overseas markets without prior or subsequent listing in Indian markets.

“Unlisted companies shall be allowed to raise capital abroad without the requirement of prior or subsequent listing in India initially for a period of two years...,” the Department of Industrial Policy and Promotion (DIPP) said.

Necessary changes have been made in the ‘Consolidated FDI Policy’ in this regard. Unlisted companies can directly list abroad only on exchanges in International Organisation of Securities Commissions/ Financial Action Task Force compliant jurisdictions or those jurisdictions with which Sebi has signed bilateral agreements.

“The capital raised abroad may be utilised for retiring outstanding overseas debt or for operations abroad including for acquisitions,” the revised FDI policy said.

In case the funds raised are not utilised abroad, it said, the company should repatriate the funds to India within 15 days and park it with a scheduled bank and “may be used domestically.”