Corporate Updates – 04-08-2015


Government has notified the norms of Composite Caps for simplifying the Foreign Direct Investment (FDI) policy, approved by the Union cabinet. All sectors barring banking and defence can now get up to 49 per cent foreign institutional investment through the automatic route. Sectors including brown field pharma, retail, insurance, pension, non-news current affairs will be the biggest beneficiaries with room to attract more foreign portfolio investment. In sectors under government approval route any transfer of ownership due to foreign investment will require prior nod from the government. As per the new norms, all direct and indirect overseas investments, whether portfolio or FDI, will be subject to a composite foreign investment cap for that particular sector. Banking and defence, which has been identified as strategic sectors by the government, there will be a sub-limit of 49 per cent and 24 per cent respectively on foreign portfolio investment. Funds flow through debt instruments like Foreign Currency Convertible Bonds (FCCBs) and Depository Receipts (DRs) will not be treated as foreign investment till they are converted into equity. The press note also said that any equity holding by a person residing outside India resulting from conversion of any debt instrument under any arrangement will be reckoned as foreign investment.


SEBI with an intention to educate all stakeholders has come out with Frequently Asked Questions (FAQ) on Delisting of Securities. The term "delisting" of securities means permanent removal of securities of a listed company from a stock exchange. As a consequence of delisting, the securities of that company would no longer be traded at that stock exchange.

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