Government tightens rights issue pricing norms for non-resident Indians

The government has tightened the rights issue pricing norms for non-resident Indians (NRIs) by disallowing acquisition of renounced shares below the fair market value.

In a notification issued under the Foreign Exchange Management Act (Fema) regulations, the Centre said: “A person resident outside India who has acquired a right from a person resident in India who has renounced it may acquire equity instruments (other than share warrants) against the said rights as per pricing guidelines.”

Experts said the notification provides much-needed clarity on the “acquisition after renunciation of rights” by NRIs. They said the rules will help curb market manipulation and money