The Indian depositary receipt (IDR) market’s long term prospects should not be harmed by the Securities and Exchange Board of India’s (Sebi) decision to bar conversion of IDRs to shares of a foreign company.
A Hong Kong-based bankers’ counsel told IFLR that Sebi’s decision would not discourage IDRs. “The Indian government has simply protected the instrument,” he said.
Sebi stipulated this month that Standard Chartered’s IDRs, currently the only ones in the market, were not fungible. They could therefore not be converted into the underlying...