Reserve Bank of India allows issue of shares under FDI scheme

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RBI allows issue of shares under FDI scheme
In what will come as a boost to companies raising funds from FDI, The Reserve Bank of India has announced its decision to allow the Indian companies to issue equity, preference shares under the government route to the foreign investors under its FDI scheme in some areas.

The central bank said that the foreign investors must make the payments directly to the Indian company raising equity and not through the third parties in order to issue shares under FDI scheme.

The categories in which the Government has allowed issuance of equity to foreign investors against the import of capital goods, machineries and equipments including second hand machines. The import of capital goods, machineries must be is in accordance with the Export / Import Policy issued by the Government of India and complies with the notifications issued by the Directorate General of Foreign Trade (DGFT) and the regulations issued under the Foreign Exchange Management Act (FEMA), 1999.

There must be an independent valuation of the capital goods, machineries; equipments (including second-hand machineries) by a third party and import documents received from custom authorities must be produced to determine the correct value of imports.

Read more about: rbi, fdi, investment, capital market
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