Indian issuers, listed outside India.

Lombard Financing does not arrange facilities against shares listed on the National Stock Exchange of India (NSE) or BSE. An Indian company’s line listed outside India may qualify instead: depositary receipts, such as American depositary shares in New York, or a secondary listing of its shares on a recognised exchange abroad, subject to the firm’s eligibility criteria.

Can you borrow against shares listed on the NSE or BSE?

No. Lombard Financing does not arrange facilities against shares listed on the National Stock Exchange of India or BSE, whoever holds them and wherever the holder is resident. Shares delivered in India when depositary receipts are cancelled are treated the same way.

The rest of this page covers the alternative: an Indian company’s line listed outside India, how it is held and pledged there, and the Indian rules that still apply to it. Facilities against shares listed in other markets are covered country by country in the firm’s global markets directory.

Which Indian lines listed abroad may qualify?

Two kinds of line may qualify: depositary receipts issued on an Indian company’s shares and listed on a recognised exchange outside India, such as American depositary shares or global depositary receipts, and a dual or secondary listing of the shares themselves on such an exchange.

Receipts that listed Indian companies have issued since 10 October 2019 must be listed on an international exchange named by SEBI. Outside India, its circular of 28 November 2019 names Nasdaq and the NYSE, the Tokyo Stock Exchange, Korea Exchange, the London Stock Exchange, Euronext Paris, the Frankfurt Stock Exchange and the Toronto Stock Exchange.

The same SEBI list also names two exchanges in the International Financial Services Centre at GIFT City, Gandhinagar, which the International Financial Services Centres Authority describes as an international financial services centre in India. Because those exchanges are in India, a line listed there is treated as Indian-listed and does not qualify.

Each line is assessed against the criteria that apply to any collateral: freely tradable, listed on a recognised exchange, free of existing liens, worth at least US$2 million equivalent, and pledged by a professional investor or the local equivalent. Receipts that are restricted or unvested, or held under a lock-up, are not freely tradable until the restriction ends.

Infosys and HDFC Bank, both incorporated in India, have American depositary shares (ADSs) listed on the New York Stock Exchange, according to their annual reports on Form 20-F for the year ended 31 March 2026. Each Infosys ADS represents one equity share and each HDFC Bank ADS three. They are named as illustrations only, not as a view on either as collateral.

How are depositary receipts held and pledged?

Receipts are held, and pledged, in the market where they trade, while the shares behind them stay in India. Under the Depository Receipts Scheme, 2014, a depositary receipt is a foreign-currency instrument issued by a foreign depository in a permissible jurisdiction against Indian securities deposited with a domestic custodian: a custodian, Indian depository, depository participant or bank with SEBI’s permission to act under the Scheme.

A pledge is therefore taken over the receipts in the account where they are held, under the law and custody arrangements of that market, rather than through India’s depositories. How the security is perfected there, and how voting instructions and distributions reach the holder under the deposit arrangements, are questions for counsel in the market of listing; how a Lombard loan is secured more generally is set out separately.

Voting runs through the depositary. Paragraph 7(1) of the Scheme entitles the foreign depository to exercise any voting rights on the underlying securities, on the holder’s instruction or otherwise; for receipts issued under SEBI’s October 2019 framework, the agreements must provide that it votes only on the holder’s instruction.

Receipts are denominated in a foreign currency, yet each represents a set number of rupee-denominated shares, so the collateral value reflects the rupee as well as the share price. A facility may be drawn in the receipts’ currency or on a cross-currency basis.

Can the receipts be converted into the underlying shares?

Yes, in both directions, within limits. Paragraph 5(2) of the Scheme allows receipts to be converted into the underlying securities and back, subject to paragraph 5(1): the securities behind receipts, together with those already held by persons resident outside India, may not exceed the limit on foreign holding under the Foreign Exchange Management Act, 1999.

India’s depositories publish the room that remains. SEBI’s framework for depositary receipts of listed companies, set by its circular of 10 October 2019, requires them to disseminate the shares against which receipts are outstanding and the limit up to which shares can be converted into receipts. The RBI also allows a domestic custodian to buy eligible instruments for a person resident outside India in order to convert them into receipts.

Cancelling receipts delivers equity shares in India, which fall outside the firm’s criteria, so a facility is framed around the receipts as they stand. Converting back into receipts later depends on the room available at the time.

Do Indian takeover and disclosure rules reach receipt holders?

Yes, where the receipts carry voting rights. Under the explanation to Regulation 2(1)(v) of SEBI’s Takeover Regulations, 2011, ‘shares’ include all depository receipts carrying an entitlement to exercise voting rights in the target company, so such receipts count towards the regulations’ thresholds.

Regulation 29 requires disclosure when a holding, with persons acting in concert, reaches 5 per cent of a target company’s shares, and again when it changes by more than 2 per cent. Regulation 29(4) treats shares taken by way of encumbrance as an acquisition by the person taking them, except where a scheduled commercial bank, public financial institution, housing finance company or systemically important non-banking financial company takes a pledge in the ordinary course of business.

Paragraph 7(4) of the Depository Receipts Scheme gives a holder of receipts on equity shares the same obligations as a holder of the underlying shares if it has the right to issue voting instructions. Whether a pledge over receipts is caught, and who would file, depends on the facts. Check with local counsel. The market where the receipts are listed has its own rules; see share-pledge disclosure rules by market.

Who may hold Indian depositary receipts?

SEBI limits who may hold receipts issued under its framework for listed companies. Paragraph 2.15 of its circular of 10 October 2019, as revised on 18 December 2020, requires a holder, including its beneficial owners, to be neither a person resident in India nor a Non-Resident Indian.

Non-Resident Indians may not subscribe for or acquire further receipts, including receipts issued before 10 October 2019, except under share-based employee benefit schemes or through bonus or rights issues. A borrower who is resident in India, or a Non-Resident Indian, should confirm the position with local counsel before anything else.

Do India’s foreign-exchange rules reach a pledge of receipts?

Possibly; the text does not settle the point. The RBI’s Master Direction – Foreign Investment in India, updated to 15 June 2026, treats the acquisition, holding or transfer of depositary receipts issued outside India on Indian securities as investment (paragraph 2.14.1).

Paragraph 7.11 sets out when a person resident outside India may pledge Indian equity instruments or units. The pledge may be to a bank in India or an RBI-registered non-banking financial company for credit to the Indian company, or to an overseas bank for credit to the holder, a non-resident promoter or an overseas group company. The overseas route requires the loan to be used for genuine business purposes overseas and not for investment in India.

Any other pledge needs the RBI’s prior approval. Paragraph 7.11 speaks of equity instruments and units, not receipts, so whether its conditions reach a pledge of receipts held abroad, or only the underlying shares once receipts are cancelled, is not answered in terms. Check with local counsel, as also for the tax treatment of a pledge, an enforcement sale or a conversion.