Top stock exchanges NSE and BSE have welcomed the government's decision to increase the foreign shareholding limit in bourses to 15 per cent, terming the move as being in sync with the spirit of globalisation, reported PTI.
In a move that may help attract more overseas capital, the Union Cabinet allowed a foreign company to own up to 15 per cent in the domestic stock or commodity exchanges as against 5 per cent currently.
The Cabinet has also approved the proposal to allow foreign portfolio investors to acquire shares through initial allotment, besides secondary market, in the stock exchanges.
Welcoming the decision, NSE's MD and CEO Chitra Ramkrishna said, "NSE has always aligned itself with global best practices. The exchange believes that the government's decision is in sync with the spirit of globalisation."
BSE also welcomed the move and said it would help best exchanges globally to acquire significant minority stake in Indian exchanges.
A BSE spokesperson said the move will connect the exchanges to savings pool across the world and bring the best in class practices to the Indian markets.
A number of foreign investors are already invested in the two leading Indian exchanges and the decision to hike the limit will help them enhance their exposure to the Indian markets.
"The Union Cabinet has given its approval for raising foreign shareholding limit from 5 per cent to 15 per cent in Indian Stock Exchanges for a stock exchange, depository, banking company, an insurance company and a commodity derivative exchange," an official statement said.
"The move will help in enhancing global competitiveness of Indian stock exchanges by accelerating/facilitating the adoption of the latest technology and global best practices, which will lead to overall growth and development of the Indian capital market," it said.
This follows an announcement made by Finance Minister Arun Jaitley in this regard in his 2016 Budget speech.