RBI stops FIIs from buying Tata Steel shares

The Reserve Bank of India (RBI) today stopped the purchase of Tata Steel shares by foreign institutional investors (FII) as the foreign investment in the world's sixth largest steel maker reached the permissible limit of 22%.

"FIIs should not purchase further equity shares in the company either through primary or secondary market without the prior approval of the regulator," RBI said in a release.

Increasing interest of foreign investors in Tata Steel, following acquisition of Anglo-Dutch steel maker Corus, has pushed up the FII stake in the company by more than 4% in the last one-and-half month.

The FII interest has continued to increase in the steel giant, though large number of retail investors exited the company following dip in share prices of Tata Steel after the acquisition of Corus.

According to data available on the Bombay Stock Exchange, the FII stake in the company was 17.24% at the end of March 31.