Regulations
Foreign Institutional Investors (FIIs), Non-Resident Indians (NRIs), and Persons of Indian Origin (PIOs) are allowed to invest in the primary and secondary capital markets in India through the portfolio investment scheme (PIS). Under this scheme, FIIs/NRIs can acquire shares/debentures of Indian companies through the stock exchanges in India.
The ceiling for overall investment for FIIs is 24 per cent of the paid up capital of the Indian company and 10 per centfor NRIs/PIOs. The limit is 20 per cent of the paid up capital in the case of public sector banks, including the State Bank of India.
The ceiling of 24 per cent for FII investment can be raised up to sectoral cap/statutory ceiling, subject to the approval of the board and the general body of the company passing a special resolution to that effect. And the ceiling of 10 per cent for NRIs/PIOs can be raised to 24 per cent subject to the approval of the general body of the company passing a resolution to that effect.
The ceiling for FIIs is independent of the ceiling of 10/24 per cent for NRIs/PIOs.
The equity shares and convertible debentures of the companies within the prescribed ceilings are available for purchase under PIS subject to:
- the total purchase of all NRIs/PIOs both, on repatriation and non-repatriation basis, being within an overall ceiling limit of (a) 24 per cent of the company's total paid up equity capital and (b) 24 per cent of the total paid up value of each series of convertible debenture; and
- the investment made on repatriation basis by any single NRI/PIO in the equity shares and convertible debentures not exceeding five per cent of the paid up equity capital of the company or five per cent of the total paid up value of each series of convertible debentures issued by the company./p>
Monitoring Foreign Investments
The Reserve Bank of India monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis. For effective monitoring of foreign investment ceiling limits, the Reserve Bank has fixed cut-off points that are two percentage points lower than the actual ceilings. The cut-off point, for instance, is fixed at 8 per cent for companies in which NRIs/ PIOs can invest up to 10 per cent of the company's paid up capital. The cut-off limit for companies with 24 per cent ceiling is 22 per cent and for companies with 30 per cent ceiling, is 28 per cent and so on. Similarly, the cut-off limit for public sector banks (including State Bank of India) is 18 per cent.
Once the aggregate net purchases of equity shares of the company by FIIs/NRIs/PIOs reach the cut-off point, which is 2% below the overall limit, the Reserve Bank cautions all designated bank branches so as not to purchase any more equity shares of the respective company on behalf of FIIs/NRIs/PIOs without prior approval of the Reserve Bank. The link offices are then required to intimate the Reserve Bank about the total number and value of equity shares/convertible debentures of the company they propose to buy on behalf of FIIs/NRIs/PIOs. On receipt of such proposals, the Reserve Bank gives clearances on a first-come-first served basis till such investments in companies reach 10 / 24 / 30 / 40/ 49 per cent limit or the sectoral caps/statutory ceilings as applicable. On reaching the aggregate ceiling limit, the Reserve Bank advises all designated bank branches to stop purchases on behalf of their FIIs/NRIs/PIOs clients. The Reserve Bank also informs the general public about the `caution’ and the `stop purchase’ in these companies through a press release.
The current list of companies allowed to attract investments from FIIs/NRIs/PIOs with their respective ceilings is:
List of companies
List of companies which have raised the ceiling from 10% in respect of NRIs investments under PIS (w.e.f. November 29, 2010)
Upto 24%
1
Alembic Chemical Works Co. Ltd.
2
Amar Investments Ltd., Calcutta.
3
Anglo- India Jute Mills Co. Ltd.
4
Arvind Mills, Ahmedabad.
5
Ashima Syntex Ltd, Ahmedabad.
6
Ashoka Viniyoga Ltd.
7
Bharat Nidhi Ltd.
8
BLB Shares & Financial Services Ltd
9
BPL Ltd.
10
Burr Brown (India) Ltd
11
Camac Commercial Company Ltd.
12
Ceenik Exports (India) Ltd.
13
Cifco Finance Ltd., Mumbai.
14
Classic Financial Services & Enterprises Ltd, Calcutta.
15
CPPL Ltd, (Reliance Ind. Infrastructure Ltd) Mumbai.
16
Crest Communication Ltd.
17
CRISIL
18
DCM Ltd.
19
DCM Shriram Consolidated Ltd.
20
Dharani Sugars & Chemicals Ltd
21
Dolphin Offshore Enterprises ( I ) Ltd.
22
Emco Ltd.
23
Essar Oil Ltd.
24
Essar Shipping Ltd., B’lore
25
Essar Steel Ltd.
26
Eveready Industries India Ltd.
27
Fabworth (I) Ltd.
28
Federal Bank Ltd.
29
Ferro Alloys Corporation Ltd., Tumsar.
30
Gammon India Ltd
31
Grasim Industries Ltd.
32
GTL Ltd.(formerly Global Tele-Systems Ltd.)
33
GTL Infrastructure Ltd
34
Hamco Mining & Smelting Ltd.
35
HCL Infosystems Ltd.
36
HEG Ltd
37
Hindustan Development Corp. Ltd, Calcutta.
38
Hindustan Nitroproducts (Gujarat) Ltd.
39
Hindustan Transmission Products Ltd., Mumbai
40
HMG Industries Ltd., Mumbai.
41
Housing Development and Infrastructure Limited
42
Indiabulls Real Estate Ltd.
43
India bulls Securities Ltd.
44
Indiabulls Financial Services Ltd
45
Indiabulls Power Limited (formerly Sophia Power Company Limited)
46
Igarashi Motors India Ltd
47
IVP Ltd
48
Jagatjit Industries Ltd,
49
Jai Parabolic Springs Ltd.
50
Jaysynth Dyechem Ltd.
51
Jindal Strips Ltd.
52
Jindal Iron & Steel Co. Ltd.
53
Jindal Saw Limited (formerly Saw Pipes Limited)
54
JJ Spectrum Silk Ltd.
55
Kartjikeya Paper & Boards Ltd.
56
K Sera Sera Productions Ltd
57
Lakhani India Ltd.
58
M.P. Agro Fertilisers Ltd., Bhopal.
59
Macleod Russel (I) Ltd.
60
Matsushita Television and Audio India Ltd.
61
Max India Ltd
62
Mazda Enterprises Ltd., Mumbai.
63
Media Video Ltd.
64
Monnet Ispat & Energy Limited
65
Multimetals Ltd., Mumbai
66
Neha International Limited.
67
National Steel Industries Ltd.
68
Nicholas Laboratories India Ltd., Mumbai.
69
Networth Stock Broking Limited
70
Nava Bharat Ventures Limited
71
O.P. Electronics Ltd., Mumbai.
72
Oriental Housing Development Finance Corp. Ltd.
73
Pabacea Biotec Ltd.
74
Padmini Technologies Ltd.
75
Pearl Polymers Ltd., New Delhi.
76
Piramal Healthcare Ltd.
77
PNB Finance & Industries Ltd
78
Rajath Leasing & Finance Ltd.
79
Rajesh Exports Limited
80
Rama Petrochemicals Ltd.
81
Rama Phosphates Ltd.
82
Reliance Industries Ltd., Mumbai.
83
Rishra Investment Ltd., Calcutta
84
Rossell Industries Ltd., Calcutta.
85
Sahu Properties Ltd
86
Sanghvi Movers Ltd
87
Saurashtra Paper & Board Mills Ltd.
88
Sayaji Hotel Ltd.
89
SB & T International Ltd
90
Sharyans Resources Ltd.
91
Shanti Gears Ltd.
92
Shibir India Ltd., Calcutta
93
Shrenuj & Company Ltd.
94
Shriram Industries Enterprises Ltd., N. Delhi.
95
Silverline Industries Ltd.
96
Sonata Software Ltd.
97
SRF Ltd.
98
Sterling Lease Finance Ltd., Mumbai.
99
Sujana Metal Products Ltd
100
Svam Software Ltd.
101
Synthetics and Chemicals Ltd., Mumbai.
102
Shrenuj & Company Limited
103
The Champdany Industries Ltd., Calcutta.
104
The Dhanalakshmi Bank Limited
105
The Dharamsi Morarji Chemical Co. Ltd .
106
The Investment Trust of India Ltd.
107
The Morarjee Goculdas Spinning & Weaving Co Ltd, Mumbai.
108
Tolani Bulk Carrier Ltd.
109
Unitech Limited.
110
Uniworth International Ltd.
111
Vaibhav Gems Ltd.
112
Valecha Engineering Ltd.
113
VisualSoft Technologies Ltd.
114
Weltermann International Ltd.
115
Woolworth (India) Ltd.
116
Yes Bank Ltd.
117
Zora Pharma Ltd.
118
M/s. Redington(India) Ltd.(w.e.f. 29.11.2010)
119
M/s. Compuage Infocom Limited (w.e.f. 4.3.2011)
120
M/s. Kitex Garments Limited (w.e.f. 8.7.2011)
121
M/s Indiabulls Wholesale Services Ltd (w.e.f. 26.08.2011)
122
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