RBI raises FII investment limit in five companies to 49 per cent
30 November 2006
Mumbai: Foreign institutional investors (FIIs) can purchase equity shares and convertible debentures of five companies up to 49 per cent of their paid-up capital under the portfolio investment scheme (PIS), the Reserve Bank of India (RBI) said through a notification.
The five companies are ICSA (India) Limited, Lakshmi Energy and Foods Ltd, ANG Auto Ltd, CESC Ltd and CREW B.O.S. Products Limited, the release said.
RBI also allowed FIIs, NRIs and persons of Indian origin (PIOs) to purchase up to 100 per cent of the paid-up capital of Aztec Software and Technology Services and Sujana Universal Industries Ltd. The boards of the two companies and shareholders have passed resolutions to that effect.
However, this will not cap FII investments through domestic mutual funds. FIIs are now believed to be routing their money into the stock markets through local mutual fund schemes and exchange traded funds. Several domestic funds have announced discounted entry loads for FIIs. The FIIs find it convenient to step up exposure to companies where cumulative or individual FII holdings have hit the permitted ceiling.