sue of IDRs. ‘‘Much as I would like to right away,’’ Mittal said, ‘‘current government norms for this purpose are not so feasible. So, we will have to wait a little while before going ahead with our plans.’’
The problem, as Mittal and many others see it is that India is yet to see capital account convertibility (CAC). This would mean that the money raised by a foreign company in Indian rupees from the Indian markets cannot be repatriated back to its country of origin freely. Which is also the reason why since the time the rules around IDRs were formulated a few years ago, there has not been a single issue until now.
Taking cognizance of the fact that no foreign company has attempted to tap the IDR Luxembourg: LN Mittal, president and CEO of Arcelor-Mittal, wants to list the world’s largest steel company on the Indian stock exchanges, using the Indian Depository Receipts (IDR). ‘‘We want to give Indian investors an opportunity to be a part of the world’s largest steel company and would like to list ArcelorMittal in India,’’ he told ToI.
While Mittal continues to hold an Indian passport, for the most part he resides in London. As for the company he controls, it is listed on the Luxembourg, Amsterdam, Brussels, Paris and New York stock exchanges among others.
For foreign companies like ArcelorMittal, raising equity capital from the Indian markets is possible through the ismarket, the government relaxed the norms under which IDRs could be issued. For instance, the limit for an overseas firm to raise money from India in a financial year was raised from 15% of its paid-up capital and free reserves to 25% of the post-issue number of equity shares.
Most of the concerns addressed by the government in relaxing the norms on IDRs, however, have no bearing on a company like Arcelor Mittal. In this case, the only thing that matters is CAC.
While full CAC is some way away, a roadmap has been put into place. ‘‘You should ask the government when will the rules on CAC be relaxed,’’ said Mittal. It is expected that once some clarity on CAC, Arcelor Mittal will begin work on listing itself on the Indian market. Arcelor Mittal, which produces about one-tenth of the total steel produced in the world, wants to expand its capacity by 40 metric tonne by 2012.
Out of this, it plans to set up 24 metric tonne plants in Jharkhand and Orissa in India with over $20 billion investment, the largest foreign direct investment (FDI) ever. However, it has met roadblocks in terms of land acquisitions and is taking various initiatives to ensure a fair deal to the people.
As part of its India strategy, Arcelor Mittal also plans to have a research and development centre in the country, which would be the company’s thirteenth centre globally.