The Reserve Bank of India (RBI) today issued detailed guidelines enabling qualified foreign investors (QFIs) to invest in Indian companies. The central bank also issued guidelines on 100 per cent foreign direct investment (FDI) in retail trading in the country.
Accordingly, QFIs or those non-resident investors other than SEBI-registered FIIs and SEBI-registered FVCIs, who meet the KYC requirements of SEBI have been allowed to purchase on repatriation basis equity shares of Indian companies provided:
Investment is made through SEBI-registered depository participants (DPs) only in equity shares of listed Indian companies through recognised brokers on recognised stock exchanges in India as well as in equity shares of Indian companies which are offered to public in India in terms of the relevant and applicable SEBI guidelines/regulations.
QFIs will also be eligible to acquire equity shares by way of rights, bonus or equity issues on account of stock split / consolidation or equity shares on account of amalgamation, demerger or such corporate actions subject to the investment limits.
They may be allowed to sell shares acquired by way of sale trough recognised brokers on recognised stock exchanges in India or in an open offer in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; or in an open offer in accordance with the SEBI (Delisting of Securities) Guidelines, 2009; or through buyback of shares by a listed Indian company in accordance with the SEBI (Buyback) Regulations, 1998.
Payment or repatriation for QFI investments under this scheme have to be made from a separate single rupee pool bank account maintained by the DP with a category 1 authorised bank in India. The DP will purchase equity at the instruction of the respective QFIs within five working days (including the date of credit of funds to the single rupee pool bank account by way of foreign inward remittances through normal banking channels) failing which the funds would be immediately repatriated back to the QFI's designated overseas bank account.