The Indian government is planning to allow sponsored American Depository Receipts (ADR)/ Global Depository Receipts (GDR) issues of companies through the automatic route.
Thus, companies would no longer need the approval of the Foreign Investment Promotion Board (FIPB) for issuing sponsored ADR/GDRs. Instead, they can proceed with ADR/GDR issues after informing the Reserve Bank of India (RBI) of their respective proposals.
Currently, although the issue of fresh shares through the ADR/GDR route is currently automatic, companies going for sponsored ADR/GDRs have to seek FIPB approval. Sponsored ADR/GDRs amount to secondary market transactions, wherein existing shares are offered for sale via sponsored issues instead of fresh shares.