The essential difference between an fccb and fceb lies in their convertibility whereby in the case of an fccb offering, the bonds convert into shares of the company that issued the bonds, while in the case of an fceb offering, the bonds are convertible into shares not of the issuer company, but that of another company forming part of its group. Nov 08, 20 april 14, 2015 dear all welcome to the refurbished site of the reserve bank of india. In other words, the money being raised by the issuing company is in. Fccb hold an option to convert into shares or redeem the bonds fccb holders filed winding up petition. Issue of foreign currency convertible bonds and ordinary shares through depositary receipt mechanism scheme, 1993. Through depository receipt mechanism scheme, 1993, as amended is inr 87.
Bond fccb a foreign currency convertible bond fccb is a type of edit pdf using cutepdf convertible bond issued. Bonds and ordinary shares through depository receipt mechanism scheme, 1993. Fcebs are exchangeable into equity share of another company, to be called the offered company, in any manner, either wholly, or partly or on the basis of any equity related warrants attached to debt instruments. Revisionsmodifications in the operative guidelines of the scheme have been made from time to time. Department of industrial policy and promotion ministry of. A scheme for issue of foreign currency convertible bonds and ordinary shares through depository receipts mechanism was notified in 1993 to allow the indian corporate sector to access global capital markets through issue of foreign currency convertible bonds. The fccbs are proposed to be issued to ifc on a private placement basis and will be unlisted. Issue of shares by indian companies under fccbadrgdr. Foreign currency convertible bonds legal parameters visa. Legal issues relating to foreign currency convertible bonds dipen chatterjee, b. Amendment to the issue of foreign currency convertible bonds.
A scheme for issue of foreign currency convertible bonds and ordinary shares through depositary receipt mechanism scheme was notified in 1993 to allow the indian corporate sector to access global capital markets through issue of foreign currency convertible bonds fccb equity shares under the global depository receipt mechanism gdr and. Reoulations, guidelines, notifications and circulars, if any, prescribed bv the government of india, reserve bank of india rbi. Further, the initial conversion price can be reset upwards on the infusion of equity through strategic partner. The fccb market grew at a spectacular pace from 2004 through 2009. Bonds and ordinary shares through depository receipt mechanism scheme, 1993 the fccb scheme issued by the government and the foreign exchange management transfer or issue of any foreign security regulations, 2000, as amended the bond regulations. Fccb governed through rbi fccb guidelines were issued in 1993 by ministry of finance under the issue of foreign currency convertible bonds and ordinary shares through depository receipt mechanism scheme, 1993. Nov 27, 20 the scheme states that an investment made in a company through gdrsfccbs shall be treated as fdi and shall be restricted to 51% of the issued and subscribed share capital of the issuing company. Foreign currency convertible bonds means bonds issued in accordance with this scheme and subscribed by a nonresident in foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole, or in part, on the basis of any equity related warrants attached to debt instruments. Adrgdr fccb proceeds in the first stage acquisition of shares in thedisinvestment process and also in the mandatory second stage offer to the public, in view of their strategic importance. The principal and interest in respect of these bonds are payable in foreign currency and these are convertible into. Issue of fccbs and ordinary shares through depository.
Domestic custodian bank it means a banking company which acts as a custodian for the ordinary shares or foreign currency convertible bonds of an indian company which are issued by it against global depository receipts or certificates foreign currency convertible. Revisionsmodifications in the operative guidelines of the scheme. Gati announces successful closing of its fccb issue hyderabad december 12. Scheme means the foreign currency convertible bonds and ordinary shares. Scheme, 1993, as amended, with company having right to buy back option the bonds.
A scheme for issue of foreign currency convertible bonds and ordinary shares through depositary receipt mechanism scheme was notified in 1993 to allow the indian corporate sector to access global capital markets through issue of foreign currency convertible bonds fccb equity shares under the global depository receipt mechanism gdr and american depository receipt mechanism adr. Gati announces successful closing of its fccb issue hyderabad december 12, 2011. Depositary receipt mechanism scheme, 1993, and subscribed by a nonresident in foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole, or in part, on the basis of any equity related warrants attached to debt instruments. Scheme, 1993, as amended fccb scheme and the depository receipts scheme, 2014 7 gdr scheme and all other applicable statutes, rules, regulations, guidelines, noti. A scheme for issue of foreign currency convertible bonds and ordinary.
Apr 01, 2009 we use your linkedin profile and activity data to personalize ads and to show you more relevant ads. Authorised dealers may bring the contents of this circular to the notice of their constituents concerned. Sourcesofinformation we have relied onthe following information for framing our opinion onthe fairness of the schemeofcompromise arrangement. Mechanism scheme, 1993, and argues that the skewed sectoral preference evident therein was not based on sound economic and regulatory policies. Feb 12, 2016 a scheme for issue of foreign currency convertible bonds and ordinary shares through depositary receipt mechanism scheme was notified in 1993 to allow the indian corporate sector to access global capital markets through issue of foreign currency convertible bonds fccbequity shares under the global depository receipt mechanism gdr and american depository receipt mechanism adr.
Issue of fccbs and ordinary shares scheme 1993 capital gains. Foreign currency convertible bond fccb means a bond issued by an indian company expressed in foreign currency, the principal and interest of which is payable in foreign currency. Members should note that dependent pension contributions are not paid on pensionable earnings above the pensions cap. Indian companies can raise foreign currency resources abroad through the issue of adrsgdrs, in accordance with the scheme for issue of foreign currency convertible bonds and ordinary shares through depository receipt mechanism scheme, 1993 and guidelines issued by the central government thereunder from time to time. Fcebs should be issued in accordance with the issue of foreign currency exchangeable bonds scheme, 2008. Amendment to the issue of foreign currency convertible. Fccb foreign currency convertible bonds one kind of security bond is issued by indian company expressed in foreign currency ie, principle and interest on such security is payable in foreign currency to be issued under accordance with the foreign currency convertible bonds and ordinary shares through depository mechanism scheme 1993 subscribed by nonresident entity in foreign.
Securities and exchanoe board of india sebi, ministry of finance department of economic affairs. Act to the issue of foreign currency convertible bonds fccbs and. The income tax department never asks for your pin numbers, passwords or similar access information for credit cards, banks or other financial accounts through email the income tax department appeals to taxpayers not to respond to such emails and not to share information relating to their credit card, bank and other financial accounts. In other words, the money being raised by the issuing. The notification has amended the regulation 31b of the scheme to permit indian unlisted companies to issue gdrs fccbs without having.
The scheme states that an investment made in a company through gdrsfccbs shall be treated as fdi and shall be restricted to 51% of the issued and subscribed share capital of the issuing company. Issue of foreign currency convertible bonds and ordinary shares. A scheme for issue of foreign currency convertible bonds and ordinary shares through depositary receipt mechanism was notified by the government of india on 12th november, 1993. In the last two decades, the equity market has developed sophisticated market infrastructure. The issuance of the fccb is subject to the fulfillment of conditions precedent. Issue of foreign currency convertible bonds and ordinary. Cost of acquisition of fccb shares tagged to nse closing. Issue of fccbs and ordinary shares through depository receipt mechanism scheme, 1993 amended. Fairnessopinion on the scheme of compromise arrangement. Domestic custodian bank it means a banking company which acts as a custodian for the ordinary shares or foreign currency convertible bonds of an indian company which are issued by it against global depository receipts or certificates foreign currency convertible bonds.
Ministry of finance government of india november, 20. A scheme for issue of foreign currency convertible bonds and ordinary shares through depository receipts mechanism was notified in 1993 to allow the indian corporate sector to access global capital markets through issue of foreign currency convertible bonds fccbs equity shares under the global. One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise. Financial results and management ratios i net worth ii capital employed iii capital turnover ratio iv equitydebt ratio longterm. Through depository receipt mechanism scheme, 1993 or any modification or. Details on the pensions cap are provided later in the document. The 1993 scheme stands repealed to the extent that it applies to drs. Share premium cannot be regarded as part of the issued share.
Fccbs are issued in accordance with the foreign currency convertible bonds and ordinary shares through depository receipt mechanism scheme 1993 and subscribed by a nonresident entity in. Enewsline nnn february 2007 disclaimer this newsletter is for information purposes and should not be construed as legal advice. Authorised dealers may bring the contents of this circular to. Fccb foreign currency convertible bonds one kind of security bond is issued by indian company expressed in foreign currency ie, principle and interest on such security is payable in foreign currency to be issued under accordance with the foreign currency convertible bonds and ordinary shares through depository mechanism scheme 1993 subscribed by non. The essential difference between an fccb and fceb lies in their convertibility whereby in the case of an fccb offering, the bonds convert into shares of the company that issued the bonds, while in the case of an fceb offering, the bonds are convertible into shares not of the issuer company, but that of another company forming part of. The present scheme governing issue of depository receipts drs was designed in 1993, at a time when indias capital markets were substantially closed to foreign capital. Issues and challenges in foreign currency convertible bonds. There the meaning of fccb is given as bonds issued in accordance with the said scheme and subscribed by a nonresident in foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole, or in part, on the basis of any equity related warrants attached to debt instruments.
Issuance of fcebs shall also conform to other applicable regulations. As per the scheme issued by department of economic affairs dea in. It was, therefore, possible to compute the cost in terms of the clauses of that scheme and which was admittedly an. Mechanism scheme, 1993 scheme and reserve bank of india. Any indian company listed or unlisted, public or private or any other issuer of permissible securities or any person holding such securities can issue drs. Scheme of compromise arrangement of gnclwith its unsecured lenders, fccb holders sundry creditors andshould not beusedfor anyother purpose.
Dec 16, 2014 the 1993 scheme stands repealed to the extent that it applies to drs. Gati announces successful closing of its fccb issue. Mechanism scheme, 1993, fccb scheme, securities and exchange board of india issue of capital and disclosure requirements regulations, 2009 and any other appropriate authorities, institutions ors bodie hereinafter collectively referred. A scheme for issue of foreign currency convertible bonds and ordinary shares through depositary receipt mechanism scheme was notified by the government of india on 12 th november, 1993. Further, to confirm our opinion, the same provisions are given in the scheme of issue of fccb and ordinary shares through drm scheme, 1993 which are produced below. Apr 08, 2019 a foreign currency convertible bond fccb is a type of convertible bond issued in a currency different than the issuers domestic currency.
Fccb is a convertible bond issued by a country in a currency different than the its own currency. Currency convertible bonds and ordinary shares through depository receipt mechanism scheme, 1993 fccb scheme, the notifications issued by the reserve bank of india rbi, including the master direction external commercial. Mechanism scheme, 1993, as amended or restated fccb scheme, the securities and exchange board of india issue of capital and disclosure requirements regulations, 2009, as amended or restated the icdr regulations, the securities and exchange board of india issue. Direct sales business to be carried on only under licence 5. For the key terms of the fccbs, please see enclosed annexure a. Act to the issue of foreign currency convertible bonds fccbs. Direct sales and antipyramid scheme act 1993 arrangement of sections part i preliminary section 1. Global depository receipts gdr and convertible bonds. A global depository receipt may be issued for one or more. Guidelines for prepaymentbuyback of fccb issues by the indian companies a scheme for issue of foreign currency convertible bonds and ordinary shares through depository receipts mechanism was notified by the government of india in november, 1993. The latest comprehensive guidelines on the issue of.
Jan 02, 2012 indian companies can raise foreign currency resources abroad through the issue of adrsgdrs, in accordance with the scheme for issue of foreign currency convertible bonds and ordinary shares through depository receipt mechanism scheme, 1993 and guidelines issued by the central government thereunder from time to time. Convertible bonds and ordinary shares through depository receipt mechanism scheme, 1993 the fccb scheme, as amended, the depository receipts scheme, 2014, the consolidated foreign direct investment policy, issued by the department. Fccbs and ordinary shares through depository receipt mechanism scheme, 1993 amended. Permission to float global issues income tax department. Adrgdrfccb issues reserve bank of india exchange control.
Issue of fccbs and ordinary shares through depository receipt. Issues and challenges in foreign currency convertible. Share premium cannot be regarded as part of the issued. Fccb regulatory mechanism ecb guidelines governs fccbs the bonds are required to be issued in accordance with the scheme viz. Judicial pension scheme 1993 cover the maximum scheme liability, i. Guidelines for prepaymentbuyback of fccb issues by the. In brief for determination of cost of acquisition of shares obtained on conversion of foreign currency convertible bonds fccbs, rule 74 of the foreign currency convertible bonds scheme, 1993 fccb scheme will. Mechanism scheme, 1993, and subscribed by a nonresident. For example, as defined by the issue of fccb and ordinary shares through depository receipt mechanism scheme 1993 of india fccbs are bonds issued in accordance with the scheme and subscribed by a non resident in foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole or in part, on. The scheme was introduced on november 12, 1993, as one of several moves to. Issue of fccbs and ordinary shares scheme 1993 free download as word doc. Domestic custodian bank it means a banking company which acts as a custodian for the ordinary shares or foreign currency convertible bonds of an indian company which are issued by it against global depository receipts or certificates. Shares through depositary receipt mechanism scheme, 1993 as amended from time to time.
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