The Hindu Business Line : Threshold limit hiked for FII/NRI investments

The threshold limit has been reset at 0.5 percentage point below the sectoral cap against the earlier limit of 2 percentage points, said an RBI release. Threshold limit is the limit at which foreign/NRI investors have to seek RBI permission for further purchase of equity in the same company.

To explain this further, take a company like Bharti Tele Ventures, to which the relaxation will be applicable.

The company has an equity base of Rs 1,853 crore and total foreign shareholding of 47.27 per cent. The cap on foreign holding in this company is 49 per cent. Earlier the threshold limit for foreign holding was 47 per cent; this would mean that foreign investors/NRIs would have had to take prior permission from the Reserve Bank to cross the 47 per cent mark.

Post this relaxation of resetting the threshold limit at 0.5 percentage point, foreign investors/NRIs need to seek RBI permission only to cross 48.5 per cent against 47 per cent earlier.

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