The government has shelved a proposal to allow companies to list simultaneously in the domestic and international markets.

A simultaneous float could raise the price of the issue substantially, making it difficult for retail investors to pick up such stock, government officials said.

If an American Depository Receipts issue is priced comparatively higher, domestic investors might suffer.

Recently, Bharat Petroleum had sought the Securities and Exchange Board of India's approval for a simultaneous ADR and domestic issue.

The regulator was approached by several other companies, too, which expected to realise more for their stock by simultaneous listing in India and abroad.

Finance ministry officials said Bharat Petroleum's case was typical given that the company wanted to also do away with the restriction on the number of shares it could offer.

"The idea is good, but such a move can create problems," said an official. As per Bharat Petroleum's original selloff plan, 25.2 per cent equity was to be offloaded through ADRs and 10 per cent in a domestic issue.

The primary markets advisory committee of Sebi has decided to defer a decision on the matter at least till December. The item was on the agenda of the last board meeting of the market regulator but was not discussed.

Bharat Petroleum's simultaneous float plan was discussed last week by an inter-ministry group on the government's plan to sell a 35.2 per cent stake through a public offer.

With easier norms for conversion of domestic shares into ADRs and Global Depository Receipts, it is not possible to keep a sizeable gap in the prices of the two issues, as that will create an arbitrage opportunity.

Companies have argued with Sebi and the finance ministry that a simultaneous float allowed better price realisation for the shares.

This is borne out by the good valuations of Indian companies in the international markets.

Besides, American and even European markets are averse to penny stocks -- scrips that are quoted very low.

The dollar equivalents of the scrips of many Indian firms are in the penny stocks range, which the companies feel can be rectified if simultaneous issues are allowed.