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Mittal plans IDRs, listing on Indian stock exchanges
Lakshmi N Mittal, president and CEO of Arcelor Mittal wants to list the world largest steel company on the Indian stock exchanges using the indian Depository Receipts “we want to give Indian investors an opportunity to be apart of the world largest steel company and would like to list arcelor mittal in India,” he told.
While Mittal continues to hold an Indian passport, for the most part he resides in london. As per the company he controls, it is listed on the Luxembourg, Amsterdam, Brussels, Paris and New York stock exchanges among others.
for foreign companies like Arcelor Mittal, raising equity capital from the indian markets is possible through the issue of IDR. “Much as i would like to right away,” Mittal said , “current goveronment norms for this purpose are not so feasible. So we will have to wait a little while before going ahead with our plans.”
The problem, as Mittal and many others see it is that India is yet to see capital account convertibility. This would mean that the money raised by a foreign company in indian rupees from the Indian markets cannot be repatriated back to its contry of origin freely. which is also the reason why since the time the rules around IDR were for mulated a few years ago, there has not been a single issue until now.
talking cognizance of the fact that no foreign company has attempted to tap the IDR market, the governoment relaxed the norms under which IDR could be issued. for instance the limit for an over seas firm to raise money from Indian in a financial year was raised from 15% of its paidup captial and free reserves to 25% of the post issue number of equity shares.
Most of the concers addressed by the goveronment in relaxing the norms on IDR however have no bearing on a company like Arcelor Mittal. In this case the only thing that matters is CAC is some way away, a roading has been put into place. “you should ask the goveronment when will the rules on CAC be relaxed,” said Mittal. It is expected that once some clarity on CAC, Arcelor Mittal will began work on listing itself on the Indian market.