MUMBAI, July 2: The number of companies where foreign institutional investors' holding has touched the investment ceiling has come down to a meagre two from nearly 20 companies one year back. The latest Reserve Bank of India list shows NIIT and HDFC as the only two companies where FII investment has reached the 24/30 per cent investment limit.Satyam Computers is the only company where FII investment is currently at the trigger-point stage of 28 per cent, just ahead of reaching the ceiling. FIIs can still continue to make purchases of Satyam Computers shares, but with prior approval from the Reserve Bank.
Surprisingly, there are three companies that have already reached the newly enhanced 10 per cent investment limit for portfolio investments by NRIs, overseas corporate bodies (OCB) and persons of Indian origin (PIO).
The three companies are Garware Shipping Co Ltd, Rajasthan Weaving and Spinning Mills Ltd and Baroda Rayon Corpo-ration.
It was only in the June 1 union budget that the government hadannounced the hike in the NRI/OCB portfolio investment limit from 2 per cent to 10 per cent of a company's equity.
In a further announcement on June 22, the government took the NRI/OCB investment limit out of the overall foreign portfolio investment limit of 24/30 per cent.
There are also three companies where NRI/OCB investment has reached the trigger point of 8 per cent. The companies are Bharati Telecom, Ion Exchange India and Madras Aluminium Co. The Reserve Bank will follow the same pattern of monitoring the investment position of NRIs/OCBs as that adopted in the case of FII investment.
"The Reserve Bank will now alert designated banks in respect of investment by NRIs/OCBs/PIOs under the portfolio investment scheme in a given company when the holding reaches 8 per cent of the company's paid-up capital.
Banks will have to take prior permission for making further purchases of shares of the company on behalf of their NRI/OCB/PIO clients.
The ban letter prohibiting further purchases byNRIs/OCBs/PIOs will be issued once the holding in the company reaches 10 per cent of the company's paid-up capital.
All designated banks have to mandatorily report the purchase and sale transactions in LEC(NRI) statements immediately," an RBI press release stated.FII investment would continue to be subject to a separate aggregate ceiling of 24 per cent and 30 per cent of the paid-up capital of a company, the release stated.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
