This Regulatory Alert summarises the A.P. (DIR Series) Circular No. 69 issued by RBI on 8 November 2013. The said Circular allows unlisted Indian companies to raise capital abroad by way of issue of DRs/ FCCB, without prior or subsequent listing in India, subject to conditions specified therein.
Currently, it seems that unlisted Indian companies can raise capital overseas only through issue of DRs/ FCCBs. At this stage it is not clear whether raising of capital through issue or sale of shares will be permitted.
Whilst the Circular provides that unutilized funds raised abroad can be repatriated to India and used for eligible purpose, the term “eligible purpose” is pending explanation.
The Ministry has opened this window as a pilot only for a two year period. The move should provide a much needed relief to capital-seeking Indian companies.
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