Market regulator SEBI on Tuesday allowed mutual funds to invest in Indian
Depository Receipts - instruments through which investors here can invest in foreign company's equity.
"It is hereby clarified that mutual funds can invest in Indian Depository Receipts (IDRs)," Securities and Exchange Board Of India (SEBI) today said in a statement here.
As per the SEBI regulations, mutual funds are allowed to invest in securities issued by the domestic entities and with this clarification by the market regulator, fund houses would now also be able to invest in IDRs.
IDRs are Indian counter parts of ADRs or GDRs through which several Indian companies have raised funds from the overseas investors.
Through IDRs it may be possible for the foreign firms to raise funds from Indian investors and it would be possible for the Indian investors to invest in equity shares of foreign companies.
The shares issued by the overseas company would be held by an overseas custodian bank and on the basis of these underlying shares the Indian depository bank would issue IDRs to the Indian investors.
Depository Receipts - instruments through which investors here can invest in foreign company's equity.
"It is hereby clarified that mutual funds can invest in Indian Depository Receipts (IDRs)," Securities and Exchange Board Of India (SEBI) today said in a statement here.
As per the SEBI regulations, mutual funds are allowed to invest in securities issued by the domestic entities and with this clarification by the market regulator, fund houses would now also be able to invest in IDRs.
IDRs are Indian counter parts of ADRs or GDRs through which several Indian companies have raised funds from the overseas investors.
Through IDRs it may be possible for the foreign firms to raise funds from Indian investors and it would be possible for the Indian investors to invest in equity shares of foreign companies.
The shares issued by the overseas company would be held by an overseas custodian bank and on the basis of these underlying shares the Indian depository bank would issue IDRs to the Indian investors.
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