11.3 in India e.g. u Pension Funds n Mutual

 

11.3
Percentage of FDI Allowed In Different Sectors

 

?Banking – 74%Banking – 74%

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?Non-banking financial
companies (stock broking, credit cards, financial          consulting,,etc.) – 100%etc.) – 100%

?Insurance – 26%Insurance –
26%

?Telecommunications –
74% Telecommunications – 74%

?Private petrol refining –
100%Private petrol refining – 100%

?Construction development –
100%Construction development – 100%

?Coal & lignite –
74%Coal & lignite – 74%

?Trading – 51% Trading
– 51%

?Electricity –
100%Electricity – 100%

?Pharmaceuticals –
100%Pharmaceuticals – 100%

?Transportation infrastructure – 100 %

? Tourism – 100%

 ?Mining – 74%Mining – 74%

?Advertising –
100%Advertising – 100%

?Airports – 74%Airports –
74%

?Films – 100%Films – 100%

?Domestic airlines –
49%Domestic airlines – 49%

?Mass transit – 100%Mass
transit – 100%

?Pollution control –
100%Pollution control – 100%

?Print media – 26% for
newspapers and current events, 100 % for scientific and technical l periodicals

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER-12

FOREIGN INSTITUTIONAL INVESTORS

 

12.1 Introduction
of foreign institutional investors

u An institution established outside India, which invests
in securities traded on the markets in India e.g.

u Pension Funds

n  Mutual Funds

n  Investment Trust

n  Insurance companies

n  Endowment Funds

n  University Funds

n  Foundations or Charitable Trusts

n  Asset Management Companies 

n  Power of Attorney Holders

n  Bank

 

 

n  Foreign Institutional Investors (FII)

n  FIIs may invest in:

n  securities in the primary and secondary markets (shares,
debentures, warrants of listed and unlisted companies)                 

n  units issued by domestic mutual funds

n  dated Government securities

n  derivatives traded on a recognized stock exchange

n  commercial paper

n  debt instruments – provided a 70/30 equity/debt ratio is
maintained

 

n  Foreign Institutional Investors (FII) Limits on the type
and amount of  investments apply to FIIs

n  no more than 10% of the equity in any one company

n  no more than 10% in the equity in any one company on
behalf of a fund sub-account

n  no more than 5% in the equity in any one company on
behalf of a corporate/individual sub-account

n  no more than 24% in the aggregate of the total issued
capital of a company to be held by FIIs

 

12.2 Investment by FIIs under Portfolio
Investment Scheme

The RBI has given
general permission to SEBI-registered FIIs/sub-accounts to invest under the
Portfolio Investment Scheme (PIS).

• The total holding
of each FII/sub-account under this scheme should not exceed 10 percent of the
total paidup capital or 10 percent of the paid-up value of each series of
convertible debentures issued by the Indian company.

• The total holding
of all the FIIs/sub-accounts put together should not exceed 24 percent of the
paid-up capital or the paid-up value of each series of convertible debentures.
This limit of 24 percent can be increased to the sectoral cap/statutory limit
as applicable to the Indian company concerned, by passing a resolution of its
Board of Directors, followed by a special resolution to that effect by its
General Body.

• A domestic asset
management company or portfolio manager who is registered with the SEBI as an
FII for managing the funds of a sub-account can make investments under the
scheme on behalf of: a person resident outside India who is a citizen of a
foreign state; or a corporate body registered outside India.

• However, such
investment should be made out of the funds raised, collected, or brought from
outside through a normal banking channel. The investments by such entities
should not exceed 5 percent of the total paid-up equity capital or 5 percent of
the paid-up value of each series of convertible debentures issued by an Indian  company, and should also not exceed the
overall ceiling speci?ed or FIIs.

x

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