It will now be easier for Indian companies to utilize the overseas equities market for raising funds for their expansion plans. The finance ministry of India has decided to make some changes in American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) rules.

The current move will be beneficial for Indian companies as the companies can price their securities at competitive rates. The prices in stock market are falling day by day. The current pricing rules deter companies to quote reasonable price for securities in the local market. As the valuations have dropped, companies are looking for alternative ways to raise money.

The ADR/GDR issue price is determined by the highest average price or last 15 days’ average price as per current rules. The finance ministry has now changed the limit to two months. The Indian companies had contributed an amount of $999 million during April-May 2008 as per data released by the Reserve Bank of India.

The finance ministry has said that it has proposed the change in rules to protect the interest of the small stakeholders. The gap between share prices of the company in the domestic stock exchanges and international market will no differ too much. The over pricing of securities will last no more as the proposed rules are implemented. The finance ministry has decided to invite suggestions from industry on ADR, GDR norms within 15 days.