Corporate India has welcomed the Reserve Bank of India's decision to allow foreign funds to buy up to the varying limits sets for foreign direct investment in specific sectors.
According to Harsh V Goenka, chairman of RPG Enterprises, "The decision is a welcome move. I am sure it will provide a significant boost to foreign direct investment in certain sectors in the country. I also believe that it is a further step in the overall reform process that India is taking up."
"Some sectors where investment cap are in the 74 per cent slab will see investment inflows on a large scale in coming years," Goenka said here on Thursday.
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Welcoming the anticipated move by the Reserve Bank of India, Vijay Paranjpe, chief financial officer of GTL Ltd (formerly Global Tele-Systems), said the Centre has finally come forward to save the equity market.
"Over the last few months, investor confidence has gone down following a series of market scams in the country. The decision to allow foreign funds to buy up to the varying limits sets for foreign direct investment in specific sectors will stabilise the market. But clouds of uncertainties in the US and other markets should be removed," he added.
"Thus far, we are not clear about the government's stand on infotech firms. If there is any move to increase the FIIs limit, we will certainly look into that issue. This will be in line with the best interests of company, shareholders and promoters." Paranjpe said.
A top official with the Hinduja group said this will enhance investments in some sectors. Several companies are expected to increase the ceiling of foreign institutional investors investment in line with the RBI move. However, response from foreign funds will be in line with the developments in global markets in the next 15-30 days.