Section 22(7) in The Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004
(7)[ (i) A Domestic Depository may acquire, hold and transfer equity shares of eligible company resident outside India, being the underlying shares for the purpose of issuing IDRs as may be authorised by such company or its Overseas Custodian Bank.(ii)A person resident in India may redeem IDRs issued by an eligible company resident outside India through a Domestic Depository, subject to compliance of the following conditions with respect to the underlying shares on redemption:(a)Listed Indian companies may either sell or continue to hold the' underlying shares subject to the terms and conditions as per Regulations 6B and 7 of the Notification No. FEMA.120IRB-2004 dated July 7, 2004, as amended from time to time.(b)Indian Mutual Funds, registered with SEBI may either sell or continue to hold the underlying shares subject to the terms and conditions as per Regulation 6C of the Notification No. FEMA.120IRB 2004 dated July 7, 2004, as amended from time to time.(c)Other persons .resident in India including resident individuals may hold the underlying shares only for the purpose of sale within a period of 30 days from the date of conversion of the IDRs into underlying shares.]
