Axis Bank has decided to take the sponsored route to issuing level 1 American Depository Receipts (ADRs), which will throw open the doors for US investors to pick up the bank’s shares without coming to India. The level 1 ADR lets an Indian company create an ADR from existing shares without going through the stringent and expensive US listing process.
The bank’s board on Wednesday approved a sponsored level 1 depositary receipt issuance programme of up to 14.2 crore depository receipts (DRs), with conversion of five equity shares to one DR. The board also approved the proposal to seek shareholders nod for increase in foreign investment cap from 62% to 74%.
Axis Bank MD and CEO Shikha Sharma told TOI that the bank had chosen to take the sponsored route so that the bank could have a more controlled programme for issue of ADRs.