Explain the following: (c) Conditions for issue of IDR

Conditions for Issue of IDR I. Companies Act, 2013 Rule 13(2) of the Companies (Registration of Foreign Companies) Rules, 2014 stipulates that the issuing company shall not issue IDRs unless: its pre-issue paid-up capital and free reserves are at least US$ 50 million and it has a minimum average market capitalization (during the last three years) in its parent country of at least US$ 100 million; it has been continuously trading on a stock exchange in its parent or home country (the country of incorporation of such company) for at least three immediately preceding years; it has a track record of distributable profits in terms of section 123 of the Act, for at least three out of immediately preceding five years; it fulfills such other eligibility criteria as may be laid down by the SEBI from time to time in this behalf. OR II. SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 Regulation 98 of SEBI (ICDR) Regulations, 2009 provides that an issue of IDR shall be subject to the following conditions: issue size shall not be less than fifty crore rupees; procedure to be followed by each class of applicant for applying shall be mentioned in the prospectus; minimum application amount shall be twenty thousand rupees; at least fifty per cent of the IDR issued shall be allotted to qualified institutional buyers on proportionate basis; the balance fifty per cent may be allocated among the categories of non-institutional investors and retail individual investors including employees at the discretion of the issuer and the manner of allocation shall be disclosed in the prospectus. Allotment to investors within a category shall be on proportionate basis; However, atleast thirty percent of IDRs being offered in the public issue shall be available for allocation to retail individual investors and in case of under subscription in retail individual investor category. Spillover to the other categories to the extent of under subscription may be permitted. at any given time, there shall be only one denomination of IDR of the issuing company. the underlying equity shares against which IDR, are issued have been or will be listed in its home country before listing of IDRs in stock exchange(s). the underlying shares of IDRs shall rank pari-passu with the existing shares of the same class.