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Enhancement in the limit on Investments 





                             Government of India
                             Ministry of Finance

                          Department of Economic Affairs
                     (Foreign Trade & Investment Division)

 

 

                                   New Delhi, dated the 22nd June, 1998




                                 PRESS NOTE
               Subject:  Enhancement in the limit on investments
                         by NRIs/PIOs/OCBs in Indian companies
                         through secondary markets .
               A Press Note enhancing individual  and  aggregate  portfolio
          investment  ceiling  by  Non-resident  Indians  (NRIs)/Persons of
          Indian Origin (PIOs)/Overseas Corporate  Bodies  (owned  by  such
          persons  to  the extent of at least 60 percent) (OCBs) was issued
          on 11th June,  1998.   In that note the  investment  limit  by  a
          single  NRI/PIO/OCB  for  purchase of shares in a company through
          stock exchanges under portfolio investment scheme was raised from
          1% to 5% and the  aggregate  limit  for  all  NRIs/PIOs/OCBs  was
          raised  from  5%  to  10%  of the paid up equity capital.   These
          limits for NRIs/PIOs/OCBs were part of the aggregate  ceiling  of
          24%  for  all  FIIs/NRIs/PIOs/OCBs  in  the  paid up capital of a
          company which could be raised to  30%  by  a  Board/General  Body
          resolution.
          2.   As  the  aggregate investment limit have been reached in the
          case of many companies the enhancement of the  NRI/PIO/OCB  limit
          would not provide greater freedom in practice in these cases.  In
          order to provide a greater margin of flexibility for NRI/PIO/OCB
          investment  it has been decided that the individual and aggregate
          ceiling for  portfolio  investments  by  NRIs/PIOs/OCBs  will  be
          exclusive of the aggregate portfolio investment ceiling for FIIs.


          The  NRIs/PIOs/OCBs  aggregate portfolio investment ceiling would
          be 10% of  the  paid  up  equity  capital  of  a  company.    FII
          investment  would  continue to be subject to a separate aggregate
          ceiling of 24%/30% of the paid up equity capital of a company.

          No. F. 10/15/98-NRI