FII investments in Rural Electrification Corporation reach RBI trigger limit
07 July 2010
The aggregate net purchases of equity shares in Rural Electrification Corporation Ltd by foreign institutional investors (FIIs) under the portfolio investment scheme (PIS) have reached the trigger limit of 10 per cent and further purchases of equity shares in the primary/secondary market of this company would be allowed only after obtaining prior approval of the Reserve Bank of India (RBI)
RBI has listed the companies where NRI/PIO investment has already reached 10 per cent and no further purchases could be allowed.
These include: Chandraprabhu Housing Ltd, Coxswain Technology Ltd (Kaveri Biotech Ltd), Dev Sugars Ltd, Dharendra Industries Ltd, DSQ Biotech Ltd, Fintech Communications, IQMS Software Ltd, Kakatiya Cement Sugar & Industries Ltd, Madras Aluminium Co Ltd, Rama Phosphates Ltd, SGN Telecom, SPL Ltd, Squared Biotech Ltd and Tai Industries Ltd.
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 cent for 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: