India tweaks foreign investment, approves FDI worth Rs3.51 bn

India tweaks foreign investment, approves FDI worth Rs3.51 bn
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First Published: Mon, Apr 30 2007. 07 50 PM IST
Updated: Mon, Apr 30 2007. 07 50 PM IST
New Delhi: Foreign investment entering as fully convertible preference shares would be treated as part of share capital, the finance ministry said on 30 April, as it unveiled new guidelines. It also approved overseas investment proposals valued at Rs3.51 billion.
A statement said such investment would also be included when calculating foreign equity for sectoral caps, and would be applicable to Indian firms mobilising foreign investment through issues of preference shares for projects and industries.
Foreign investment entering as any other type of preference share, such as non-convertible, optionally convertible or partially convertible, would be treated as debt.
This would be required to meet external commercial borrowing guidelines, the statement said.
The new norms come into effect immediately, the statement said, adding the issue of preference shares of any type would continue to conform to guidelines issued by the Reserve Bank of India and Securities and Exchange Board of India.
Moreoever, the government approved a proposal of Patil Rail Infrastructure Pvt. Ltd. to raise foreign equity of as much as 49%, entailing an investment of Rs2.4 billion rupees, the ministry said.
The government approved a proposal of Cable & Wireless Networks India Pvt. Ltd. to raise as much as 74% of foreign equity in a company providing international and domestic long-distance telecommunications services. The proposal is for an investment of Rs500 million, the ministry said.
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First Published: Mon, Apr 30 2007. 07 50 PM IST