When a company incorporated outside India wants its shares to be traded by Indian investors without itself listing here, it does so through an Indian Depository Receipt (IDR) — a rupee-denominated instrument created by a domestic depository against underlying foreign shares. Only one issuer has ever used the route in practice, Standard Chartered PLC, whose IDRs listed on the BSE and NSE in June 2010 and were finally delisted in July 2020. Yet the regime survives in Chapter VII of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Regulations 65 to 80), because the conceptual problem it solves is permanent: how do you make a foreign issuer, governed by its home-country company law, answerable to Indian receipt-holders who never see its register of members? This chapter answers that question through a tightly drawn code of equitable treatment, periodic financial reporting, corporate-governance comparison, voting and delisting safeguards. This article maps every operative regulation in Chapter VII and grounds the disclosure philosophy in the leading securities-law authorities.
What an IDR is: the statutory foundation
An Indian Depository Receipt is defined under Section 390 of the Companies Act, 2013 read with Rule 13 of the Companies (Registration of Foreign Companies) Rules, 2014, as an instrument in the form of a depository receipt created by a domestic depository in India and authorised by a company incorporated outside India that is making an issue of such receipts. The underlying shares are held abroad by an overseas custodian bank; the domestic depository in India issues the IDRs against those shares to Indian investors. The receipt-holder therefore holds a derivative beneficial interest, not the foreign share itself, and crucially has no direct entry on the foreign register of members. That structural gap — the receipt-holder is one step removed from the share — is precisely what the LODR obligations in Chapter VII are designed to bridge.
Section 390 empowers the Central Government to frame rules on the offer of IDRs, the disclosures in the prospectus or letter of offer, the manner in which they are dealt with in a depository mode, and the procedure for their transfer or redemption. It expressly applies whether or not the foreign company has a place of business in India. The issue stage is governed primarily by the SEBI (Issue of Capital and Disclosure Requirements) Regulations; the continuing obligations after listing are what Chapter VII of the LODR codifies. For the broader framework of when and to whom the LODR applies, see our note on the introduction, scope and definitions.
Regulation 65 — to whom Chapter VII applies
Regulation 65 fixes the perimeter of the chapter. Its provisions apply to a listed entity whose securities market regulator is a signatory to the Multilateral Memorandum of Understanding of the International Organization of Securities Commissions (IOSCO MMoU), and which has issued Indian Depository Receipts as defined under Rule 13 of the Companies (Registration of Foreign Companies) Rules, 2014. The IOSCO MMoU condition is the analytical heart of the regulation: India will only host receipts of issuers whose home regulator has committed to cross-border cooperation and information-sharing, because SEBI's own enforcement reach stops at the border. The home regulator becomes, in effect, the first line of supervision, and the MMoU is the channel through which SEBI can obtain information about misconduct that occurs abroad.
This is a different applicability test from the rest of the LODR, which keys off the type of security listed in India. For equity-share issuers the relevant trigger is Regulation 15 onwards, discussed in our note on specific listing obligations for equity shares. Chapter VII instead carves out a self-contained code for the foreign IDR issuer, recognising that you cannot mechanically apply domestic-company obligations to an entity whose primary corporate law is foreign.
Regulation 66 — the working vocabulary
Regulation 66 supplies the chapter-specific definitions that the operative provisions repeatedly invoke. An IDR Holder is the holder of the Indian Depository Receipts. A depository agreement is the agreement between the listed entity and the domestic depository — the contractual spine of the whole arrangement, since it is through this agreement that voting instructions, dividends and corporate benefits flow back and forth. The home country or country of origin is the country where the listed entity is incorporated and listed. A security holder is the holder of the security or equity shares of the listed entity in its home country.
The definition of security holder is doing quiet but heavy work throughout Chapter VII. Many of the operative obligations are framed comparatively — the IDR holder must be treated no less favourably than, or equitably with, the security holder in the home country. The home-country security holder is thus the benchmark against which the adequacy of Indian disclosure and treatment is measured. The regulation deliberately imports the home-country standard rather than inventing a fresh Indian one, so that the foreign issuer is not whipsawed between two inconsistent regimes.
Regulation 67 — the general obligations and dispute resolution
Regulation 67 lays down the foundational continuing obligations. The listed entity must conduct all its correspondence with the recognised stock exchange(s) and with IDR holders in English; it must continuously comply with the rules and regulations of its country of origin; it must furnish such information to the stock exchange as may be required on a continuous basis; and — importantly for any aggrieved Indian investor — it must agree that Indian courts and tribunals shall have jurisdiction over matters relating to the IDRs. Without that submission to Indian jurisdiction, an IDR holder seeking redress would be forced into a foreign forum under foreign law, defeating the protective purpose of the listing.
The regulation also routes disputes between the entity and its investors through a mechanism of mediation, conciliation or arbitration in the manner specified by the Board, and refers disputes under the chapter to arbitration under the bye-laws of the stock exchanges. SEBI's broader push toward an Alternative Dispute Resolution mechanism (notified in 2023) reinforces this design. The general-obligations philosophy here mirrors the duties imposed on ordinary listed entities under the common obligations of listed entities — continuity of compliance, cooperation with the exchange and accessibility to investors — adapted for the cross-border setting.
Regulation 68 — disclosure of material events and price-sensitive information
Regulation 68 is the IDR analogue of the equity-issuer materiality regime. The listed entity must promptly inform the stock exchange(s) of all events that are material, all information that is price-sensitive, and anything that has a bearing on the performance or operation of the entity, in the manner and to the extent specified in Schedule III, Part C. The schedule catalogues the disclosable events: board meetings on dividends and results, changes in the board, auditors and the compliance officer, alterations to capital, issuances of securities, shareholder resolutions, mergers and reconstructions, regulatory actions and prohibitory orders, strikes or lockouts, and — significantly — any information simultaneously disclosed to an overseas exchange. That last item closes the most obvious arbitrage: a foreign issuer cannot tell its London or New York market something material while keeping its Indian receipt-holders in the dark.
The legal centrality of timely, truthful disclosure was emphasised by the Supreme Court in N. Narayanan v. Adjudicating Officer, SEBI, (2013) 12 SCC 152, where the Court upheld penalties against a whole-time director of a listed company that had inflated its revenues and profits in published financial statements, observing that "disclosure and transparency are the two pillars on which market integrity rests." Although that case arose under the PFUTP Regulations rather than the LODR, its reasoning travels directly to Regulation 68: the prompt-disclosure obligation exists precisely so that the price discovered on the exchange reflects true information, and a misstatement or a suppression strikes at the integrity of the market itself.
Regulation 69 — IDR holding pattern and shareholding details
Regulation 69 requires the listed entity to file with the stock exchange the IDR holding pattern on a quarterly basis, within fifteen days of the end of the quarter, in the format specified by the Board. Sub-regulation (2) layers on the home-country shareholding disclosures: the entity must also file the shareholding pattern, and the pre- and post-arrangement shareholding pattern and capital structure in cases of corporate restructuring such as mergers and amalgamations, as required by the listing authority or stock exchange in its home country or in other jurisdictions where its equity shares are listed. SEBI's master-circular guidance further requires that information furnished under Regulation 69(1) be disclosed on the entity's own website.
The fifteen-day quarterly cadence keeps the Indian market continuously aware of how concentrated or dispersed the IDR base is — a matter that bears directly on liquidity and on the risk of a thin float. As the Standard Chartered programme wound down, the number of outstanding IDRs fell from the 240 million originally issued in 2010 to roughly 7.5 million by mid-2020; a regularly filed holding pattern is exactly the data point that lets investors and the exchange track such a contraction. The disclosure-principles backbone — that disclosures be timely, accurate and complete — is developed in our note on the principles governing disclosures.
Regulations 70 and 71 — periodical financial results and the annual report
Regulation 70 obliges the entity to file periodical financial results with the stock exchange in such manner, within such time and to the extent that it is required to file them under the listing requirements of its home country, complying with the preparation and disclosure standards in Schedule IV, Part B. The schedule is notably accommodating: results may be annual, half-yearly or quarterly according to home-country practice; they may be prepared under Indian GAAP, IFRS or US GAAP with reconciliation where appropriate; they must be audited or subject to limited review, with any audit qualification disclosed and explained; and they may be denominated in an approved reporting currency such as Sterling, Euro, Yen or US Dollar, but must carry an Indian Rupee translation. This calibrated deference avoids forcing a foreign issuer to maintain two parallel accounting systems while still ensuring the Indian investor can read the numbers in rupees.
Regulation 71 deals with the annual report. The entity must submit its annual report to the stock exchange at the same time as it is disclosed to the security holders in its home country or other jurisdictions where its securities are listed. The report must contain the balance sheet, the profit and loss account, the auditor's report, and all periodical or special reports otherwise sent to security holders, again complying with Schedule IV, Part B. The simultaneity principle recurs here just as it did under Regulation 68: the IDR holder is entitled to the financial story at the same moment as the home-country shareholder, not on a delayed Indian timetable.
Regulation 72 — corporate governance and the comparative analysis
Regulation 72 takes a distinctive comparative approach to corporate governance. Rather than imposing the Indian governance code wholesale, it requires the listed entity to comply with the corporate-governance provisions applicable in its home country and in the other jurisdictions where its equity shares are listed. It then requires the entity to submit to the stock exchange a comparative analysis of those home-country and other-jurisdiction governance provisions, together with its compliance, measured against the corporate-governance requirements that Regulations 17 to 27 of the LODR impose on ordinary Indian listed entities.
This is a clever device. SEBI cannot realistically dictate the board structure of a foreign company governed by its own company law, so instead it forces transparency about the difference: the Indian investor is handed a side-by-side comparison and can judge for herself whether the issuer's home regime is weaker on, say, independent directors or audit oversight than the Indian standard. The substantive content of those benchmarks — board composition under Regulation 17 and the audit committee under Regulation 18 — is examined in our notes on board of directors composition and the audit committee. Regulation 72 thus converts the unavoidable regulatory gap into a disclosure obligation rather than pretending the gap does not exist.
Regulation 73 — documents and information to IDR holders
Regulation 73 ensures that the documents and information flowing to home-country security holders also reach the IDR holders, on the same timeline and to the same extent. Electronic copies of the annual report go to IDR holders who have registered their email addresses; physical copies go to those who request them through the domestic depository or the compliance officer; and the pre- and post-restructuring capital structure and shareholding patterns must be furnished in corporate transactions such as mergers, amalgamations and other schemes. The regulation operationalises the depository agreement defined in Regulation 66 — it is through that contractual conduit, and the domestic depository's register of IDR holders, that the issuer's communications are pushed out to Indian investors.
The provision reflects a settled principle of investor protection running through Indian securities law: the investor who has put money into a listed instrument is entitled to the information necessary to make an informed decision about it. The Supreme Court underscored that the entire SEBI framework exists "to protect the interests of investors in securities" in Sahara India Real Estate Corporation Ltd. v. SEBI, (2013) 1 SCC 1, when it held the Sahara group liable for raising public money through optionally fully convertible debentures while bypassing the disclosure and listing discipline that public issues attract. Regulation 73 is a concrete instance of that protective mandate, ported to the cross-border IDR setting.
Regulation 74 — equitable treatment of IDR holders
Regulation 74 is the doctrinal centrepiece of the chapter. It requires, in four sub-regulations, that the listed entity ensure IDR holders are treated equitably with the security holders in the home country. For any corporate action permitted under Indian law, IDR holders must be given treatment equivalent to that of the home-country security holders. In events such as takeovers, delistings and buybacks, while complying with home-country law, the entity must extend equitable treatment to IDR holders vis-a-vis the home-country security holders. And the entity must protect the interests of IDR holders in respect of corporate benefits permissible under both Indian and home-country law, and adequately address their grievances.
The recurring formula — "equitable treatment vis-a-vis security holders in the home country" — is not a guarantee of identical treatment, because some home-country corporate actions may simply not be capable of being mirrored in India. It is a guarantee against discrimination: the foreign issuer cannot extract value for its home-country base while leaving its Indian receipt-holders worse off. This anti-discrimination principle is the IDR-specific expression of the broader fairness norm in the disclosure regime, and it should be read alongside the principles governing disclosures, which insist that listed entities deal with all classes of investors even-handedly.
Regulation 75 — newspaper advertisements
Regulation 75 requires the listed entity to publish certain information in newspapers: the periodical financial results required to be disclosed, and the notices given to its IDR holders, must be published by advertisement in at least one English-language national daily circulating in the whole or substantially the whole of India, and in one Hindi national daily. The provision recognises that not every retail IDR holder monitors the exchange's electronic filing system; a newspaper advertisement is a deliberately low-tech, broad-reach channel to ensure that material results and notices actually reach the investing public. It mirrors the equivalent advertisement obligation that ordinary listed entities carry, adapted for the IDR class.
Regulations 76 and 77 — terms and structure of IDRs
Regulation 76 governs the economic terms. Dividends must be paid within the timeframe applicable in the home country or other listing jurisdictions, whichever is earlier, so that the payment reaches IDR holders by the dividend payment date; unclaimed dividends cannot be forfeited until the legal claim period in the home jurisdiction expires, and any wrongful forfeiture must be reversed; and the IDRs must otherwise carry such terms as the Board may specify from time to time. The unclaimed-dividend safeguard is a direct protection against the issuer quietly absorbing money that belongs to inattentive small investors.
Regulation 77 addresses the structure of the underlying. The shares underlying the IDRs must rank pari passu with the existing shares of the same class, and any difference in classes based on differing criteria must be disclosed in the annual report. The entity cannot exercise a lien on fully paid-up underlying shares supporting the IDRs, and on partly paid shares a lien is confined to moneys called or payable at a fixed time. Subject to home-country regulation, advance payments on the underlying shares may carry interest but cannot confer dividend or profit-participation rights. These provisions ensure the receipt is a faithful proxy for the share — neither subordinated in rank nor encumbered by the issuer's claims — which is the entire premise of buying an IDR rather than the share itself.
Regulations 78 and 79 — record date and voting
Regulation 78 requires the entity, where its home country or other listing jurisdictions so demand, to fix a record date for the payment of dividends or the distribution of corporate benefits to IDR holders, and to give at least four working days' advance notice of that record date, with its purpose, to the recognised stock exchange(s). The record-date mechanism is what allows the depository to crystallise, on a fixed cut-off, exactly which IDR holders are entitled to a given benefit — indispensable in a continuously traded instrument where ownership changes daily.
Regulation 79 tackles the hardest problem of the depository structure: voting. Because the IDR holder is not on the foreign register, she cannot vote the underlying share directly. Regulation 79 therefore requires the entity to send proxy forms to IDR holders, directly or through an agent, with the forms indicating that the holder may vote for or against each resolution; and it provides that IDR holders' voting rights shall be exercised in accordance with the depository agreement. Voting is thus mediated — the holder instructs, and the depository (or its nominee) votes the underlying share on those instructions under the contractual machinery defined in Regulation 66. This is the practical compromise that makes a receipt over a foreign share a workable participating instrument rather than a purely economic claim.
Regulation 80 — delisting of IDRs
Regulation 80 closes the lifecycle. If the listed entity decides to delist its IDRs it must give fair and reasonable treatment to IDR holders, and must comply with the delisting norms specified by the Board or the stock exchange. Critically, sub-regulation (3) provides that where the underlying equity shares are themselves delisted, the entity must delist and cancel the IDRs — the receipt cannot float free of the share it represents. This played out in practice when Standard Chartered PLC terminated its IDR programme: it announced the decision in March 2020 and the IDRs were delisted from the BSE and NSE with effect from 22 July 2020, with an exit mechanism for the residual holders. The "fair and reasonable treatment" standard in Regulation 80 is the IDR counterpart of the investor-protection concern that animates the delisting regime for ordinary equity, ensuring that the exit door does not slam on minority receipt-holders.
Two-way fungibility and why the regime still matters
A defining feature of the Indian IDR is its two-way fungibility. By a SEBI circular of 1 March 2013, IDRs were made partially fungible — within a financial year an investor could redeem IDRs into the underlying equity shares, and convert shares back into IDRs, up to 25% of the IDRs originally issued, with the available "headroom" defined as the IDRs originally issued less those outstanding. From 1 March 2016 Standard Chartered moved to continuous two-way fungibility. Fungibility is what links the Indian price to the home-country price and prevents the receipt from drifting into an isolated, illiquid pocket; it is the mechanism that makes the Chapter VII disclosure obligations economically meaningful, because an informed Indian investor can act on a mispricing by redeeming or converting.
Although the IDR route has lain dormant since the Standard Chartered delisting, Chapter VII remains live law and a recurring examination topic for two reasons. First, it is the cleanest illustration in the LODR of how Indian securities regulation handles a foreign issuer it cannot directly govern — through the IOSCO MMoU gateway, comparative governance disclosure, and equitable-treatment guarantees rather than wholesale imposition of Indian norms. Second, the policy debate over reviving cross-border depository instruments resurfaces periodically. For the full architecture of the LODR within which this chapter sits, return to the SEBI LODR notes hub.
Frequently asked questions
Which regulations of the SEBI LODR Regulations, 2015 govern Indian Depository Receipts?
Chapter VII, comprising Regulations 65 to 80, governs the continuing listing obligations of an entity that has listed its IDRs. Regulation 65 sets applicability, Regulation 66 defines terms, and Regulations 67 to 80 lay down the substantive obligations on general compliance, material events, holding pattern, financial results, the annual report, corporate governance, documents to holders, equitable treatment, advertisements, terms and structure of the IDRs, record date, voting and delisting. The issue stage is separately governed by the SEBI ICDR Regulations and Section 390 of the Companies Act, 2013.
Why does Regulation 65 refer to the IOSCO MMoU?
Because SEBI's enforcement reach stops at India's border. Regulation 65 confines the chapter to issuers whose home securities regulator is a signatory to the IOSCO Multilateral Memorandum of Understanding, which commits regulators to cross-border cooperation and information-sharing. The home regulator becomes the primary supervisor of the foreign issuer, and the MMoU is the channel through which SEBI can obtain information about misconduct occurring abroad. It is a precondition designed to ensure SEBI is not left powerless against an issuer it cannot itself police.
How are IDR holders protected when they cannot vote the underlying foreign shares directly?
Through the proxy and depository-agreement machinery in Regulation 79. The listed entity must send proxy forms to IDR holders, directly or through an agent, allowing them to vote for or against each resolution, and the voting rights are then exercised in accordance with the depository agreement defined in Regulation 66. Voting is therefore mediated: the IDR holder instructs, and the domestic depository (or its nominee) votes the underlying share accordingly. This converts a purely economic receipt into a participating instrument.
What does Regulation 72's comparative analysis of corporate governance require?
Regulation 72 does not impose the Indian governance code on the foreign issuer. Instead it requires the entity to comply with the corporate-governance provisions of its home country and other listing jurisdictions, and then to submit to the stock exchange a side-by-side comparative analysis of those provisions and its compliance, benchmarked against the requirements of Regulations 17 to 27 of the LODR applicable to ordinary Indian listed entities. It converts an unavoidable regulatory gap into a transparency obligation, letting investors judge the issuer's governance for themselves.
What is the significance of the Standard Chartered IDR programme?
Standard Chartered PLC was the first and, to date, only company to issue IDRs in India. Its IDRs (ten IDRs representing one underlying share) listed on the BSE and NSE on 11 June 2010, raising roughly Rs 2,670 crore, and were delisted with effect from 22 July 2020. The programme is the only real-world testing ground for Chapter VII — illustrating two-way fungibility from 2013, continuous fungibility from 2016, and the delisting and exit mechanics under Regulation 80 on its conclusion.
How do the LODR IDR disclosure obligations connect to broader securities-law principles?
They are concrete applications of the investor-protection mandate that runs through Indian securities law. In Sahara India Real Estate Corporation Ltd. v. SEBI, (2013) 1 SCC 1, the Supreme Court emphasised that the regulatory framework exists to protect investors and enforced disclosure discipline against an issuer that raised public money while bypassing it. In N. Narayanan v. Adjudicating Officer, SEBI, (2013) 12 SCC 152, the Court held that disclosure and transparency are the pillars of market integrity and penalised inflated financial statements. Regulations 68, 70, 71 and 73 are the IDR-specific machinery for the same principles.