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Indian cos get

freedom to raise

money overseas

BOMBAY: India's finance ministry has let companies off the overseas funding leash, allowing them to run around foreign equity markets without prior government approval, reports said on Thursday.

In a new hands-off policy published in the national press, the ministry scrapped all procedural requirements for companies to make private and public international equity offerings.

Companies no longer need to line up to have their applications scrutinised ... The move is likely to spur more companies to reach out to global markets and get global valuation for their stock prices," said the Economic Times.

Under the new norms, companies keen to issue American (ADR) or Global Depository Receipts (GDR) could go ahead after appointing a merchant banker registered with the capital markets regulator.

Companies which have raised money would only have to inform the finance ministry and the central bank 30 days after the issue. Analysts said the new policy was in line with ongoing economic reforms and globalisation measures.

"This is a very sensible move. Wall Street is a much harsher judge of companies than any government. We expect a lot of companies to raise money overseas," said stock broker Gaurav Sanghvi, at a domestic brokerage.

India's ambitious information technology firms were expected to be among the main beneficiaries.

"ADRs and GDRs will now be like domestic issues. Comapnies can use the cash proceeds from the issue to fund acquisitions abroad," said Nimesh Kampani, chairman of JM-Morgan Stanley.ÑAFP