Companies Act, 2013

Procedure for Issue of Global Depository Receipts (GDRs)

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Khushboo Sharma Khushboo Sharma
Khushboo Sharma

Published on: Nov 5, 2025

Priya Gandhi
Priya Gandhi

Updated on: Nov 5, 2025

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Introduction:

Global Depository Receipts (GDRs) allow companies to raise capital internationally by issuing shares through a foreign depository bank. The process of issuing GDRs includes getting approvals from authorities, adhering to rules under the Companies Act, FEMA and SEBI Regulations.

Global Depository Receipt means any instrument in the form of a depository receipt, by whatever name called, created by a foreign depository outside India and authorised by a company making an issue of such depository receipts. For example: Infosys Limited has issued GDR on the Luxembourg Stock Exchange or Axis Bank Ltd. which has issued GDR on the London Stock Exchange.

GDR can be issued as under:

  1. Via public offering, private placement, or other foreign market methods, and may be listed/traded on overseas exchanges, or
  2. Issued either against newly issued shares or sponsored by existing shareholders, subject to government/RBI conditions
  3. Underlying shares are held in the name of the overseas depository bank, which then issues the corresponding DRs to foreign investors.

Eligibility Criteria for Issuance and Transfer of Permissible Securities for Depository Receipts:

  1. Listed company can issue Permissible Securities for Depository Receipts (DRs) only if:
    • Neither the Company nor its Associates (promoters, promoter group, directors, selling shareholders) are barred by SEBI from accessing the capital market.
    • No Director/Promoter of the Company is also a director or promoter of any other company barred by SEBI.
    • Company, its Promoters, and Directors are not classified as wilful defaulters or fugitive economic offenders.
  2. Existing holders can transfer Permissible Securities for DRs only if:
    • Neither the Company nor the Transferring Holders are barred by SEBI from accessing the capital market or classified as wilful defaulters.
    • Transferring Holders, Promoters, or Directors are not classified as fugitive economic offenders.

Note: Permissible securities shall mean equity shares and debt securities, which are in dematerialized form and rank pari passu with the securities issued and listed on a recognized Stock Exchange.

Intermediaries involved in the Issuance of GDR:

Intermediaries involved in the Issuance of GDR

Applicable Provisions:

  1. Section 41, 61, 62, 96, 100, 173 of Companies Act, 2013
  2. Rule 3, 4, 5, 6, 7 of Companies (Issue of Global Depository Receipts) Rules, 2014
  3. Para 2 of SEBI Circular on Framework for Issue of Depository Receipts dated October 10, 2019
  4. Part IV (Para A(1)(b)(i)) of Master Direction – Reporting under FEMA

Mandatory Requirements:

  1. Ensure issuance of Depository Receipts (DRs) only with Permissible Securities as the underlying.
  2. Obtain both Board Resolution and a Special Resolution (shareholder approval) to authorize the issuance.
  3. Issuance or transfer of Permissible Securities for DRs is allowed only within Permissible Jurisdictions.
  4. Enter into arrangement with Custodian, Indian Depository and Foreign Depository to facilitate the process.

Procedure:

  1. Convene Meeting of Board of Directors:
    Company shall convene a Meeting of its Board of Directors to pass a Board resolution for the following:
    • To consider and approve issuance of global depository receipts subject to Members’ Approval of the Company
    • To delegate authority to Company Secretary or any one director of the company to sign, certify and file the required form with Registrar of Companies and to do all such acts and deeds as may be necessary to give effect to issue such public offer.
    [Please refer to the Procedure for Conducting Board Meeting for further details.]
  2. Convene General Meeting:
    Company shall pass special resolution for issue of global depository receipts, in a duly convened meeting of its members.
    [Please Refer the Procedure for Preparation and Signing of Minutes of General Meeting].
  3. File Form MGT-14 with ROC:
    Company shall file a copy of Board Resolution and Special Resolution passed in its duly convened Board meeting and General meeting in Form MGT-14 within 30 days of passing such resolution along with the requisite documents and fees, with the Registrar of Companies (ROC).
  4. Appointment of Compliance Officer:
    Issuing company shall appoint a merchant banker or a practising chartered accountant or a practising cost accountant or a practising company secretary to oversee all the compliances relating to issue of depository receipts.
  5. Enter into Agreement with Intermediaries:
    Issuing company shall sign the following agreement:
    • Custodian Agreement with the Indian Custodian to hold the underlying shares
    • Depository Agreement (as applicable), with the Foreign Depository Bank to issue the GDRs abroad.
  6. File Copy of Initial Document with SEBI and Stock Exchanges:
    Issuing company shall, through an intermediary, file with SEBI and the Recognized Stock Exchange(s):
    • Copy of the initial document for initial issue of depository receipts issued on the back of Permissible Securities
    • Final document for initial issue for record purpose.
  7. Approval from Recognised Stock Exchange:
    Before issuing depository receipts, the company must obtain in-principle and trading approval from:
    • Recognized Stock Exchange in India, and
    • Relevant International Exchange where the depository receipts will be listed.
    The DRs must be listed on one of the specified International Exchanges located in a Permissible Jurisdiction.
  8. Convene Meeting of Board of Directors for Allotment of Underlying Shares:
    Issuing company shall convene a Meeting of its Board of Directors immediately after closure of all formalities of the issue of depository receipts to ensure the following:
    • Approve the final terms of issue, including number of GDRs and the issue price
    • Allotment of underlying shares in the custody of domestic custodian bank and subsequently DRs to be issued by the overseas depository bank
    • Place Compliance Report prepared by the appointed merchant banker or practicing chartered accountant, cost accountant, or company secretary, certifying that all issuance formalities were met
    • Closure of all the formalities pertaining to issuance of depository receipts such as delivery of share certificates and transfer of funds.

    * Note: If a committee reviews the report, it must include at least one independent director, where the company is legally required to have independent directors on its board.
    [Please refer to the Procedure for Conducting Board Meeting for further details.]

  9. Filing Form PAS-3 with the Registrar:
    File return of allotment in Form PAS-3, within 30 days of passing of the resolution for allotment of shares with following attachments:
    • Copy of special resolution passed in the general meeting of the company
    • Copy of Board Resolution for Allotment of Shares
    • List of Allottees stating their names, addresses, occupation and number securities allotted to each of allottees
    • Valuation Report of Registered Valuer
    • Form PAS-5 (Record of allottees)
    • Any other mandatory attachment if necessary.
  10. Report Issuance of Underlying Shares to RBI:
    Issuing company shall report the issue of equity shares to the Overseas Depository Bank (which holds them on behalf of foreign investors under Deposit Scheme), in Form FC-GPR, in Single Master Form, not later than 30 days from the issue date of equity instruments.
  11. File Public Disclosures on Recognized Stock Exchange:
    Issuing company must ensure that any public disclosures made on the international exchange(s), as required by the rules of the listing jurisdiction or the exchange itself, are also filed with the recognized stock exchange in India within 24 hours of the original disclosure.
  12. Key Rules Governing Depository Receipt Proceeds and Holder Rights:
    • Proceeds from the issue of depository receipts must be:
      • Remitted to a bank account in India, or
      • Deposited in an Indian bank operating abroad, or
      • Deposited in a foreign bank (which is a Scheduled Bank under the RBI Act, 1934) with operations in India, provided that the foreign bank agrees to provide all required information.
    • In the case of a sponsored issue of depository receipts, the proceeds from the sale should be credited directly to the bank accounts of the respective shareholders.
    • Receipt holders gain membership and voting rights only after converting their depository receipts into the underlying shares, strictly following the defined Scheme and relevant law.
    • Prior to conversion, the overseas depository retains the right to vote the underlying shares on behalf of the holders, as established by the tripartite agreement with the company.

Abbreviation used:

  1. GDRs – Global Depository Receipts
  2. SEBI – Securities and Exchange Board of India
  3. ROC – Registrar of Companies
  4. DRs – Depository Receipts

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