Foreign Direct Investment (FDI) in India - Transfer of Shares/Preference Shares/Convertible Debentures by way of Sale - Revised pricing guidelines

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....nded from time to time. 2. In terms of Schedule 1 of the Notification, an Indian company may issue equity shares/compulsorily convertible preference shares and compulsorily convertible debentures (equity instruments) to a person resident outside India under the FDI policy, subject to inter alia, compliance with the pricing guidelines. Further, in terms of the A. P. (DIR Series) Circular No.16 dated October 4, 2004 and A. P. (DIR Series) Circular No. 63 dated April 22, 2009, general permission is available for transfer of equity instruments, by way of sale, from residents to non-residents (including transfer of subscriber's shares) of an Indian company in sectors other than financial service sector (i.e. Banks, NBFCs, Insurance, Asset Recon....

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....d customers concerned. 7. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (Salim Gangadharan) Chief General Manager-in-Charge Annex-I [Annex to A. P. (DIR Series) Circular No. 49 dated May 4, 2010 Paragraph No. [cf. A.P.(DIR Series) Circular No. 16 dated October 4, 2004] Existing Provisions Revised Provisions 2.2 Transfer by Resident to Non-resident (i.e. to incorporated non-resident entity other than erstwhile OCB, foreign national, NRI, FII) Transfer by Resident to Non-resident (i.e. to foreign national, NRI, FII and inc....

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..... by incorporated non-resident entity, erstwhile OCB, foreign national, NRI and FII) to Resident Sale of shares by a non-resident to resident shall be in accordance with Regulation 10 B(2) of Notification No. FEMA 20/2000-RB dated May 03,2000 which is as below: Price of shares transferred by way of sale, by non-resident to resident shall not be more than the minimum price at which the transfer of shares can be made from a resident to a non-resident as given in para 2.2 above. a) Where the shares of an Indian company are traded on stock exchange (b) where the shares of an Indian company are not listed on a recognized stock exchange in India, the transfer of shares shall be at a price not less than the fair value to be determined by a SE....