The Reserve Bank of India's norms for raising foreign institutional investment (FII) in Indian companies beyond 24 per cent up to the sectoral ceiling is not likely to have any impact on the pharmaceutical industry which already has 100 per cent permissible limits for foreign direct investments (FDI).
An analyst with an investment bank said: "Though the permitted level for FDI in the sector is already at 100 per cent, no company rushed in to meet this limit. So the new norms will not necessarily make the pharma stocks hot picks." Industry experts said these norms would not affect investment patterns much as 100 per cent limits previously prevailed.
An analyst with a broking house said: "This should not affect the pharmaceutical sector as the already permissible levels of 100 per cent FDI has not been utilised by the companies. It would provide for a larger buying field."
Those companies which will be allowed to attract investment up to 24 per cent from NRIs/ OCBs/ PIOs include Alembic Chemical Works, Jaysynth Dyechem, MP Agro Fertilisers, Nicholas Laboratories India, Piramal Healthcare, Synthetics and Chemicals, The Dharamsi Morarji Chemical Company and Zora Pharma.
For Nalco Chemicals India, NRI/ OCB investment has reached 8 per cent and further purchases are allowed only with prior approval from the RBI.
Orchid Chemicals and Pharmaceuticals and Ranbaxy Laboratories are among the companies for which FII investment is allowed up to 30 per cent of their paid-up equity capital, while for DSQ Biotech NRI/ OCB investment has reached its 10 per cent limit and no further purchase can be allowed.
