The Reserve Bank of India (RBI) has allowed foreign institutional investors (FIIs) to invest in primary issuances of companies’ non-convertible debentures (NCDs), provided these papers are scheduled to be listed on the stock exchanges within 15 days of being issued.
If the papers are not listed within 15 days, the foreign investor concerned would have to sell the securities to a domestic investor, the central bank said. “The terms of offer to FIIs or sub-accounts should contain a clause that the issuer of such debt securities shall immediately redeem or buyback the said securities from the FIIs or sub-accounts of FIIs in such an eventuality (if the debentures are not listed),” RBI said.