Recently, the capital market regulator, SEBI, tweaked the rules to bring ADR/GDRs — securities or foreign depository receipts issued to overseas investors against stocks issued by Indian companies — under the takeover code. The rule, however, applies to ADR/GDRs where the holders of the securities are entitled to exercise voting rights on the shares underlying the receipts.
What this simply means is that any foreign investor holding ADRs/GDRs with voting rights will have to make an open offer to public shareholders, if the holding touches the 15% limit — just as it applies to any local investor buying shares in the local market.
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