Overseas Direct Investment

The Corporate Affairs Ministry is looking at various aspects, including the possible eligibility criteria, to prepare the rules for direct overseas listing of Indian companies, a senior official said on Friday. Currently, overseas listings by local listed entities are carried out through American Depository Receipts (ADRs) and Global Depository Receipts (GDRs). The official said the ministry is in discussions with finance ministry as well as other stakeholders to finalise the rules for Indian companies to list overseas. Various aspects such as eligibility criteria are being discussed for permitting overseas listing. It is also being looked at whether both listed and unlisted domestic companies could be allowed to list abroad but things are under discussion, the official said. The provision is part of the companies law, which is being implemented by the corporate affairs ministry. For the direct overseas listing framework, an enabling provision would be made under the Companies Act,

India Inc's investment in their overseas ventures dropped by 59 per cent on an annual basis to USD 1.03 billion in August this year, data from Reserve Bank showed on Friday. The RBI data on Outward Foreign Direct Investment (OFDI) for August 2022 showed that the total financial commitment by the domestic firms was worth USD 1,027.67 million in August, 2022-23. In the same month of 2021-22, it stood at USD 2,500.97 million (USD 2.5 billion). In the preceding month of July 2022, Indian businesses' overseas financial investment was USD 1,116.69 million (USD 1.12 billion). Of the total investment during August this fiscal, the highest was in the form of equity infusion at USD 585.65 million. While USD 266.63 million was infused by way of issuance of guarantees, the rest USD 175.39 million was through loans. RBI said the data is provisional and subject to change based on online reporting by authorised dealer (AD) banks. Among the major investors, Lenskart Solutions infused equity wort

Holding less than 10% in an overseas entity not considered 'control'

New rules will be effective from Monday

In the preceding month (February 2022), the outward foreign direct investment was USD 940.62 million

The domestic companies had invested $2.23 billion in their overseas joint ventures and fully-owned subsidiaries during December 2020 in the previous financial year

The overseas direct investment of domestic companies more than doubled to $2.80 billion in June this year, according to RBI data

The regulator also intends to introduce late submission fee for delayed reporting of overseas direct investments (ODI) by Indian parties and resident Indians

P-notes with derivatives as underlying may be allowed

Direct loans can be sought for infractructure projects over Rs 5,000 cr

A company can invest up to a certain percentage of its net worth (equity plus reserves) in overseas subsidiaries and, hence, there is no absolute cap prescribed by RBI