The Ministry of Corporate Affairs (“MCA”) has received references from stakeholders seeking clarity on applicability of provisions of Chapter III of Companies Act, 2013 (“CA, 2013”) [Prospectus and Allotment of Securities] and Rule 18 of companies (Share Capital and Debenture) Rules, 2014 [Rule on issue of secured debentures] to issue of Rupees Denominated Bonds (“RDB”) by Indian Companies to persons resident outside India.
In light of the above, the MCA vide Circular No. 09/2016 dated 3 August 2016 has clarified that, the issue of RDB to overseas investors is being regulated by RBI as part of ECB Policy framework. Hence, provisions of Chapter III and Rule 18 of Companies (Share Capital and Debenture) Rules, 2014 would not apply to issue of RDB made exclusively to person resident outside India in accordance with applicable sectoral regulatory provisions.
Further, necessary amendments required in this regard are being made in Companies (Share Capital and Debenture) Rules, 2014.
To read the full text of circular, please click the below link:
http://www.mca.gov.in/Ministry/pdf/GeneralCircular09_03082016.pdf