RBI allows foreign portfolio investors to reclassify investments as FDI if they exceed 10% of a company’s equity.

The Reserve Bank of India (RBI) introduced a new framework to allow foreign portfolio investors (FPIs) to reclassify their investments as foreign direct investments (FDI) if they exceed a 10% limit of a company's total paid-up equity. FPIs must either divest or reclassify their holdings within five trading days, subject to government and investee company approval. The reclassification is not allowed in sectors prohibited for FDI, and FPIs must comply with reporting requirements under the Foreign Exchange Management Act.

November 11, 2024
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