What are euro issues?

Answer 1

By Subrata Kumar Baliarsingh, Bangalore A scheme has been initiated during 1992 to allow the Indian Corporate Sector to have access to the Global Capital markets through issue of Foreign Currency Convertible Bonds (FCCBs)/Equity Shares under the Global Depository Mechanism. Under this scheme, companies with consistent track record of good performance (financial or otherwise) for minimum period of three years can have access to international capital market. The three year track record requirement has been relaxed for companies making Euro issues for financing projects in the infrastructure sector like power generation, telecommunication, petroleum exploration and refining, ports, airports and roads. Euro issues by companies to finance activities which are predominantly within Annexure III of the New Industrial Policy with foreign equity holding inclusive of the likely foreign equity through Euro issues within 51 per cent would be considered and cleared by the Department of Economic Affairs. Cases involving funding of activities outside Annexure III and also where foreign equity holding after the Euro issue is likely to exceed 51 per cent would require FIPB approval after an in principle approval by the Department of Economic Affairs. Comprehensive guidelines for Euro issues were announced on 19 June 1996 which provide for greater flexibility to Indian companies to access the global market through GDR/ADR/FCCB issues. Indian corporates have successfully launched 91 Euro issues in the international markets, raising an amount of about US $ 8332.02 million + S Fr. 172 million. The Government had announced relaxation in guidelines for GDR/ADR issues by Indian Companies during 1998-99.