Clarification of the Government’s issuance of Bonus Stocks to Existing Foreign Investors
New Delhi, April 8 (PTI) government clarified that a sector engaged in banning foreign direct investment could issue bonus shares to its existing foreign shareholders as long as the equity model does not change.
The Ministry of Promoting Industry and Internal Trade (DPIIT) stated that the issuance of bonus shares must comply with applicable rules, laws, regulations and guidelines (DPIIT).
“An Indian company engaged in industry/activity prohibited by FDI can issue bonus shares to its pre-existing non-resident shareholders, provided that the shares of the non-resident shareholders in the issuance of shares will not change the shares,” DPIIT clarified, which is DPIIT clarified, which is on the FDI’s policy. ”
It added that this clarification is about the permissibility of banning Indian companies engaged in the FDI industry from issuing bonus shares to existing foreign shareholders.
The country’s FDI can be accessed through automatic routes in most areas, while in areas such as telecommunications, media, pharmaceuticals and insurance, foreign investors need government approval. However, overseas investment is also banned in some sensitive sectors.
Under the government approval channel, foreign investors must pay prior tribute to the relevant departments or relevant departments in advance, and under the automatic channel, only after the investment is made, overseas investors must be notified to the Reserve Bank of India (RBI).
Currently, FDI prohibits foreign direct investment in certain sectors (such as lottery, gambling and gambling, CHIT funds, Nidhi Company, real estate operations) as well as certain sectors of cigars that use tobacco, Cheroots, Cheroots, cigars and cigarette manufacturing.
FDI is important because India will need to invest heavily in the next few years to boost growth in its infrastructure sector. Healthy foreign inflows also help maintain payment balance and value of rupee.
