TaxTMI 
TaxTMI 
Monitoring of Foreign Investment limits in listed Indian companies
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....s related aspects under FEMA. 2. As per FEMA, the onus of compliance with the various foreign investment limits rests on the Indian company. In order to facilitate the listed Indian companies to ensure compliance with the various foreign investment limits, SEBI in consultation with RBI has decided to put in place a new system for monitoring the foreign investment limits. The architecture of the new system has been explained in Annexure A. 3. The depositories (NSDL and CDSL) shall put in place the necessary infrastructure and IT systems for operationalizing the monitoring mechanism described at Annexure A. The Stock Exchanges (BSE, NSE and MSEI) shall also put in place the necessary infrastructure and IT systems for disseminating information on the available investment headroom in respect of listed Indian companies. 4. The depositories shall issue the necessary circulars and guidelines for collecting data on foreign investment from listed companies. The system for collecting this data from the companies shall go live on the date of the issuance of this circular. The companies shall provide the necessary data (details of which have been mentioned in Annexure A) to the deposi....
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....oration iv. PAN number v. Applicable Sector vi. Applicable Sectoral Cap vii. Permissible Aggregate Limit for investment by FPIs viii. Permissible Aggregate Limit for investment by NRIs ix. Details of shares held by FPI, NRIs and other foreign investors, on repatriable basis, in demat as well as in physical form x. Details of indirect foreign investment which are held in both demat and physical form xi. Details of demat accounts of Indian companies making indirect foreign investment in the capital of the company xii. Whether the Indian company that has total foreign investment in it , is either not owned and not controlled by resident Indian Citizens or is owned or controlled by person's resident outside India (Yes or No) xiii. ISIN-wise details of the downstream investment in other Indian companies The information provided by the companies shall be stored in a Company Master database. The Designated Depository, if required, may seek additional information from the company for the purpose of monitoring the foreign investment limits. The companies shall ensure that in case of any corporate ac....
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....of the company 11.5. The system shall calculate the percentage of FPI holding in the company and the investment headroom available as at the end of the day with respect to the aggregate FPI investment limit 11.6. If the available headroom is 3% or less than 3% of the aggregate FPI investment limit, a red flag shall be activated for that company. 11.7. Thereafter, the depositories and exchanges shall display the available investment headroom, in terms of available shares, for all companies for which the red flag has been activated, on their respective websites. 11.8. The data on the available investment headroom shall be updated on a daily end-of-day basis as long as the red flag is activated. Sectoral cap of the company 11.9. The system shall calculate the total foreign investment in the company by adding the aggregate NRI investment on the stock exchange, the aggregate FPI investment in the company and other foreign investment as provided by the company in the company master. 11.10. If the total foreign investment in a company is within 3% or less than 3% of the sectoral cap, then a red flag shall be activated for that company. 11.11. Thereafter, the deposi....
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.... illustrated with the help of an example provided below. Total shares that can be purchased by foreign investors till sectoral cap is not breached 600 Total quantity purchased by foreign investors on T day 1000 Breach quantity 400 Time Foreign Investor Purchased quantity Cumulative Purchase by foreign investor Quantity to be disinvested by the foreign investor 1000 hrs ABC 100 100 40 1015 hrs XYZ 250 350 100 1145 hrs TYU 50 400 20 1230 hrs POI 180 580 72 1300 hrs QSX 120 700 48 1400 hrs REW 150 850 60 1410 hrs LOP 150 1000 60 Total 1000 400 17. As can be observed from the above table, the foreign investors/FPIs/NRIs which are required to disinvest shall be identified and shall be informed of the excess quantity that they are required to disinvest. 18. In the case of FPIs which have been identified for disinvestment of excess holding, the depositories shall issue the necessary instructions to the custodians of these FPIs for disinvestment of the excess holding within 5 trading days o....