The document discusses listing Indian companies on the Frankfurt Stock Exchange (FSE). It notes that German investors have invested €1.5 billion in Indian companies traded on the FSE. Several sectors popular among German investors are mentioned. The steps taken by the Deutsche Borse and Bombay Stock Exchange to facilitate listings are summarized. Reasons for Indian companies to list on the FSE include greater liquidity and visibility to international investors. Requirements for listing in different market segments are briefly outlined. Examples of major Indian companies already listed on the FSE are provided. Contact information is given for the listing agents.
Participatory Notes commonly known as P-Notes are instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India – SEBI. SEBI has permitted foreign institutional investors to register and participate in the Indian stock market in 1992.
Investing through P-Notes is very simple and hence very popular amongst foreign institutional investors because Participatory notes are instruments used for making investments in the stock markets. However, they are not used within the country. They are used outside India for making investments in shares listed in the Indian stock market. That is why they are also called offshore derivative instruments.
In the Indian context, foreign institutional investors (FIIs) and their sub-accounts mostly use these instruments for facilitating the participation of their overseas clients, who are not interested in participating directly in the Indian stock market.
How do Participatory Notes work?
India based brokerage houses buy Indian securities on behalf of foreign investors such as Hedge Funds and issue PNs to them. This PN is basically a contract between the foreign investor and the broking entity which assumes the responsibility of trading on behalf of the foreign investor. Any dividends or capital gains collected from the underlying securities go back to the investors.30% FII money in stocks through P-Notes
According to estimates, more than 30 per cent of foreign institutional money coming into India is from hedge funds or other international funds. This has led Sebi to keep a close watch on FII transactions, and especially hedge funds. Hedge funds, which thrive on arbitrage opportunities, rarely hold a stock for a long time. With a view to monitoring investments through participatory notes, Sebi had decided that FIIs must report details of these instruments along with the names of their holders.
Tax Saving
Some of the entities route the investment through participatory notes can take advantage of the tax laws of certain preferred countries, who have Double Tax Avoidance Treaty with India. For examble : A large number of FIIs who trade on the Indian stock markets through the Participatory Notes route operate from Luxemberg. According to Double Taxation Avoidance Act between India and Luxemberg, capital gains arising from sale of shares are taxable in the country of residence of the shareholder and not in the country of residence of the company whose shares have been sold. Therefore, a company based in Laxemberg selling shares of an Indian company will not pay tax in India. Since there is no capital gains tax in Mauritius, the gain will escape tax altogether. And FII’s investing in P-Notes from a country with no tax treaty with India are obliged to pay tax in India as per Income Tax Act.
External / Overseas sources of funds for MNCs by Anshika SinghAnshikaSingh141
MNCs require a lot of external sources of funding for their long term capital requirements.
International fund raising used to be the domain of multinational companies. MNCs not only source raw material across the world or sell products at many geographical regions, they are also scouting for capital all over the world and raise capital where it is cheaper. However with globalization and increased cross-border capital flows, smaller companies are enjoying the benefits of raising capital in the international market.
Here we would like to dwelve deeper into the different sources of funds of finance used by Multinational companies for their working capital and long term capital requirements.
The sources of finance researched are American Depository Receipts, Global Depository Receipts, Samurai bonds and Masala Bonds.
Instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with Securities and Exchange Board of India are called Participatory Notes or P-Notes.
Participatory Notes commonly known as P-Notes are instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India – SEBI. SEBI has permitted foreign institutional investors to register and participate in the Indian stock market in 1992.
Investing through P-Notes is very simple and hence very popular amongst foreign institutional investors because Participatory notes are instruments used for making investments in the stock markets. However, they are not used within the country. They are used outside India for making investments in shares listed in the Indian stock market. That is why they are also called offshore derivative instruments.
In the Indian context, foreign institutional investors (FIIs) and their sub-accounts mostly use these instruments for facilitating the participation of their overseas clients, who are not interested in participating directly in the Indian stock market.
How do Participatory Notes work?
India based brokerage houses buy Indian securities on behalf of foreign investors such as Hedge Funds and issue PNs to them. This PN is basically a contract between the foreign investor and the broking entity which assumes the responsibility of trading on behalf of the foreign investor. Any dividends or capital gains collected from the underlying securities go back to the investors.30% FII money in stocks through P-Notes
According to estimates, more than 30 per cent of foreign institutional money coming into India is from hedge funds or other international funds. This has led Sebi to keep a close watch on FII transactions, and especially hedge funds. Hedge funds, which thrive on arbitrage opportunities, rarely hold a stock for a long time. With a view to monitoring investments through participatory notes, Sebi had decided that FIIs must report details of these instruments along with the names of their holders.
Tax Saving
Some of the entities route the investment through participatory notes can take advantage of the tax laws of certain preferred countries, who have Double Tax Avoidance Treaty with India. For examble : A large number of FIIs who trade on the Indian stock markets through the Participatory Notes route operate from Luxemberg. According to Double Taxation Avoidance Act between India and Luxemberg, capital gains arising from sale of shares are taxable in the country of residence of the shareholder and not in the country of residence of the company whose shares have been sold. Therefore, a company based in Laxemberg selling shares of an Indian company will not pay tax in India. Since there is no capital gains tax in Mauritius, the gain will escape tax altogether. And FII’s investing in P-Notes from a country with no tax treaty with India are obliged to pay tax in India as per Income Tax Act.
External / Overseas sources of funds for MNCs by Anshika SinghAnshikaSingh141
MNCs require a lot of external sources of funding for their long term capital requirements.
International fund raising used to be the domain of multinational companies. MNCs not only source raw material across the world or sell products at many geographical regions, they are also scouting for capital all over the world and raise capital where it is cheaper. However with globalization and increased cross-border capital flows, smaller companies are enjoying the benefits of raising capital in the international market.
Here we would like to dwelve deeper into the different sources of funds of finance used by Multinational companies for their working capital and long term capital requirements.
The sources of finance researched are American Depository Receipts, Global Depository Receipts, Samurai bonds and Masala Bonds.
Instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with Securities and Exchange Board of India are called Participatory Notes or P-Notes.
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Want to start doing business in the Netherlands? This is an excellent manual to inform you about the most important items. Feel free to contact me if you have any questions.
Welcome to the Netherlands, Eindhoven (Brainport region)!
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Want to start doing business in the Netherlands? This is an excellent manual to inform you about the most important items. Feel free to contact me if you have any questions.
Welcome to the Netherlands, Eindhoven (Brainport region)!
Contents
Issues 2
Facts 3
Analysis 4
Conclusions 9
Issues
1. How the company should treat the record of buying materials with different currencies?
2. How the company should treat the record of sales with different currencies?
3. What risk have this company associates with their direct sale in a foreign country with different currency?
4. Why might a company want its stock listed on a stock exchange outside of its home country?
5. Why might a company be interested in investing in an operation in a foreign country (foreign direct investment)?
Facts
Besserbrau AG is a German beer producer headquartered in Ergersheim, Bavaria. The company, which was founded in 1842 by brothers Hans and Franz Besser, is publicly traded, with shares listed on the Frankfurt Stock Exchange. Manufacturing in strict accordance with the almost 500-year-old German Beer Purity Law, Besserbrau uses only four ingredients in making its products: malt, hops, yeast, and water. While the other ingredients are obtained locally, Besserbrau imports hops from a company located in the Czech Republic. Czech hops are considered to be among the world’s finest. Historically, Besserbrau’s products were marketed exclusively in Germany. To take advantage of a potentially enormous market for its products and expand sales, Besserbrau began making sales in the People’s Republic of China three years ago. The company established a wholly owned subsidiary in China (BB Pijio) to handle the distribution of Besserbrau products in that country. In the most recent year, sales to BB Pijio accounted for 20 percent of Besserbrau’s sales, and BB Pijio’s sales to customers in China accounted for 10 per-cent of the Besserbrau Group’s total profit. In fact, sales of Besserbrau products in China have expanded so rapidly and the potential for continued sales growth is so great that the company recently broke ground on the construction of a brewery in Shanghai, China. To finance construction of the new facility, Besserbrau negotiated a listing of its shares on the London Stock Exchange to facilitate an initial public offering of new shares of stock.
Analysis
1- How the company should treat the record of buying materials with different currencies?
The company on this study case use materials from another country and this situation make the company keep certain accounting records that could help them describe this reality.
The company should record the account payable of the hops in Euros if that is possible an the dilemma associated to the exchange in the foreign country currency will be out of the picture but since maybe this could not be the case the company should record the account payable for the value of the invoice at the present currency exchange rates and by the time of the contract payment adjust the journal entry adding the loss or gain in foreign currency exchange.
An important rule of accounting is that your balance sheet and income statement must be reported in your home curre.
Target the German-speaking investment community with translated press releases.
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Brief overview of Foreign Portfolio Investments - impact on the economy and impact by the economic variables, with special statistics & focus on India.
Similar to Fse listings listing_companies_from_india_on_the_frankfurt_stock_exchange (20)
1. FSE Listings – Listing Companies From
India On The Frankfurt Stock Exchange
Author: Mark Bragg
An FSE Listings Inc Article
FSE Listings Inc- Frankfurt Stock Exchange Listings
List your firm fast with FSEListings.com!
Disclaimer: The Listing Group as a consortium and in their individual capacities are not licensed broker dealers or financial institutions within the
jurisdiction of the Frankfurt Markets or any other market, they are working in the capacity of consultants listing the company and performing investor
relations of which they have been able to successfully assist in making introductions for raising funds for past ventures traded on the Frankfurt Stock
Exchange and privately.
2. FSEListings.com- Frankfurt Stock Exchange Listings
Listing Companies From India On The Frankfurt Stock Exchange
Monday, July 19, 2010 @ 06:07 AM
posted by admin
Listing Companies From India On The Frankfurt Stock Exchange
Activity of Indian companies on the Frankfurt Stock Exchange has been impressive to say the least. At
Deutsche Börse, all Indian equity instruments are actively traded within the unregulated market. Deutsche
Börse‘s Indian equity instruments are significantly more liquid compared to London SE and Luxembourg SE.
Companies from almost all sizes are most liquid at Deutsche Börse.
In total about € 1.5 bn is invested in Indian companies by German investors. The biggest German investor is
DWS.
IT / Telecom, Utilities / Energy, Financials, Automobile and Consumers are the major focus of German
Investors. These hot topic sectors are the corner stone of the Indian economy and make for great IPO and
listing candidates.
In February 2007 the Deutsche Borse AG (Frankfurt Stock Exchange) purchased 5% of the Bombay Stock
Exchange (BSE) which led to the November 2008 cooperation agreement in which both partners agreed to
simplify access to their stock exchanges for companies in their respective markets.
A variety of events thereafter unfolded:
November 2008: India Forum at the German Equity Forum 2008 in Frankfurt
With presentations about the Indian economic, – business culture and commercial law, as well as sector and
companies presentations together with Beiten Burkhardt
November 2008: Indian Securities Forum 2008
Participation as a sponsor and speaker at the Indian Securities Forum Meetings in Mumbai and Delhi with
potential companies together with BSE
April 2009: Listing Seminar in Mumbai
With presentations concerning opportunities of a cross-boarder listing and legal requirements of a listing at
Deutsche Börse.
November 2009: India Forum at the German Equity Forum 2009 in Frankfurt
Phone: +44208123 5719 - www.fselistings.com - e-mail: info@fselistings.comPage 2
3. With presentations of Indian companies to potential investors Meetings of Indian companies with Deutsche
Börse Listing Partners
January 2010: Meetings with investment banks and advisors
June 2010: Listing Seminar in Mumbai
With presentations concerning opportunities of a cross-boarder listing and legal requirements of a listing at
Deutsche Börse.
Reasons For Indian Companies to List:
The liquidity situation of the different international stock exchanges has shown that, in general, liquidity in
stock trading in Frankfurt is significantly higher. Greater liquidity through higher trading volumes is a good
basis for a fair valuation of a company on the capital markets.
The approved indices of the Frankfurt Stock Exchange increase the visibility of Indian companies and attract
the attention of Indian and European investors alike. In Germany, Indian companies come together with
analysts with expertise in a specific sector, especially in those sectors where Germany is particularly strong.
Companies can access investors all over the world through the Xetra trading platform of the Frankfurt Stock
Exchange. Currently, a total of over 250 trading members are listed on XETRA.
A range of market segments which allow issuers to choose the market segment that best suits them, taking into
account access criteria, post-admission obligations and the objectives pursued by the listing. The listing
procedure at the Frankfurt Stock Exchange is one of the fastest in the world and the listing fees are highly
attractive compared to other international Frankfurt Stock Exchange competitors.
Particularities In Connection With Indian Issuers One specific concern for Indian issuers is that, according to
Indian law, a direct listing of shares of an Indian company on a foreign stock exchange is not possible. A direct
admission would be conceivable only via a holding structure if the holding (and issuer of the shares to be
admitted) has its registered office outside of India and only the operational companies are located in India. Due
to common language and laws, it is recommended this would be done via a UK Holding Company.
Choice Of Market Segments On The Frankfurt Stock Exchange Issuers at the Frankfurt Stock Exchange can
choose between the Regulated Market (General Standard/ Prime Standard) and the stock exchange only-
regulated Open Market (First/Second Quotation Board and Entry Standard). In principle, access to the
Regulated Market is only possible with a securities prospectus approved by the supervisory authority in the
issuer’s home member state within the European Economic Area (EEA). Moreover, issuers in the Regulated
Market are subject to the post-admission obligations of the EU Transparency Directive as implemented in
German law. As regards post-admission obligations, the Prime Standard offered by the Frankfurt Stock
Exchange to its issuers is a quality segment that imposes even stricter requirements on issuers than the EU
Transparency Directive.
Admission to the Open Market (First Quotation Board and Entry Standard segments) does not in require a
securities prospectus. In this respect and in comparison to some European competitors requiring a document
similar to a prospectus for admission to their stock exchange regulated market segments, the Frankfurt Stock
Exchange provides easier, faster and less costly access to capital markets, especially as the drafting of a
securities prospectus or comparable document is both time consuming and costly for the issuer.
Phone: +442081235719 - www.fselistings.com - e-mail: info@fselistings.comPage 3
4. Whereas no post-listing obligations have to be observed for the First Quotation Board segment listing, issuers
for the Entry Standard undertake to comply with certain post-listing reporting requirements.
Contact info@fselistings.com to choose a suitable structure for your company!
This material is the property and copyright within the jurisdiction of Belize and international Copy Right of
FSE Listings Inc.
Examples of Indian Listed Companies
AXIS BANK LTD
BAJAJ HLDG+INDV.GDR S IR10
CROMPTON GREAVES
DR REDDYS LABS
FINL TECHS I.GDR REG S/7
GAIL INDIA
GT EASTERN ENERGY
HDFC BANK LTD
ICICI BANK LTD ADR/2
INDIABULLS REAL
INFOSYS TECHS
LARSEN+TOUBRO
MAHANAGAR TELE NIG.
MAHINDRA+MAHIN.GDR/REG.S
PATNI COMP. SYS
RANBAXY LABORATORY
REDIFF.COM I.ADR0,5 IR-05
RELIANCE INFRASTRUCTURE
RELIANCE INDUSTRIES
Phone: +442081235719 - www.fselistings.com - e-mail: info@fselistings.comPage 4
5. SATYAM COMPUTER
SIFY TECHNOLOGIES LTD
STATE BANK OF INDIA
STEEL AUTH. OF. IND
STERLITE IND
SUZLON ENERGY LTD
TATA COMMUNICATIONS
TATA MOTORS
TATA STEEL
WIPRO LTD
Frankfurt Listing- No upfront fees
Our listings company, http://www.fselistings.com has had great success listing companies on the Frankfurt
Stock Exchange within a 3-6 week window depending on jurisdiction and complexity. There is no upfront fees
associated to the process, we charge the funds after the company is trading on the Frankfurt Stock Exchange.
The company is only responsible for initial incorporation documents, and ensuring they qualify prior to being
signed as a client.
While your currency is strong against the Euro, you should take advantage of this opportunity to list!
*Listing fees are reduced based upon upfront payments.
Our capital raising partners are interested in working with Oil and Gas, Resources, Technology, and
Development companies. Once your firm is listed, we can assist in introducing 1-10 million euro of financing.
Contact for references and to see if you are qualified for this program: info@fselistings.com
Phone: +442081235719 - www.fselistings.com - e-mail: info@fselistings.comPage 5
6. FSE Listings Inc guarantees the success of your listing! www.fselistings.com
Contact us with your information!
Robert Russell, Russell@fselistings.com FSE Listings Professional
Mark Bragg, Info@fselistings.com FSE Listings Professional
Mr. R.T. Gibson, Info@fselistings.com FSE Listings Specialist
New York: +1-914-613-3889
UK: +44(0)2081235719
Hong Kong: 81753591
South Africa: +27110836116
www.fselistings.com
Please include:
Company Name:
Contact Name:
Contact Number:
Contact Email:
Amount of Capital invested to date:
Amount of Capital required:
Reasons for wanting to list:
Description of Business:
Website if available:
Contact FSE Listings Agents Robert Russell or Mark Bragg today!
Phone: +442081235719 - www.fselistings.com - e-mail: info@fselistings.comPage 6