Instruments of investments in foreign direct investment FDI


Posted on 03-07-2016        By ADMIN

Instruments of investments in foreign direct investment FDI

Debenture: The Indian Company can issue Fully, compulsorily &mandatorily convertible Debentures subject to pricingguidelines/valuation norms prescribed under FEMA Regulations.Debentures shall be required to be fully paid, and should bemandatorily and fully convertible.Condition: The Indian Company can issue above mentioned securities subject topricing guidelines/valuation norms prescribed under FEMARegulations.Price Guidelines:o The price/conversion formula of convertible capital instruments should be determinedupfront at the time of issue of the instruments.o The price at the time of conversion should not in any case be lower than the fair valueworked out, at the time of issuance of such instruments, in accordance with the extant1FEMA regulations

Whether Indian Company can issue Non-Convertible/ optionally convertible or PartlyConvertible Preference Shares or Debentures to Foreign Investors under FDI?No, Indian Company can’t issue Non-Convertible/ optionally convertible or PartlyConvertible Preference Shares or Debentures to Foreign Investors under FDI.If Company will issue the same and received the fund will be consider as Debt. Accordinglyall norms applicable for ECBs relating to eligible borrowers, recognized lenders, amount andmaturity, end-use stipulations, etc. shall apply.

companies act 2013 notes

free notes for company law

  



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