During June 2008, the Union Finance Ministry cleared 13 proposals of FDI amounting to Rs.1,525 crore. Among the proposals cleared only two were or big size and involved FDI of Rs.500 crore and above. The First proposal was by Golboot Holdings Ltd., Cyprus. The company intends to invest in Indian companies to the tune of Rs.700 crore through subscribing to unsecured fully and compulsorily convertible debentures. The second large proposal cleared was by India Rizing Fund, Mumbai. The company, intends to accept contribution from overseas investors and to issue units against the money received for making investment in defence SME.
Among the other proposals cleared prominent ones were by Gayatri Infra Ventures Ltd., and Apollo Health Street Ltd. Gayatri infra plans Induction of foreign equity of Rs.200 crore (up to 49 per cent) for making downstream investment. Apollo Health intends to raise around Rs.61 crore through Pre-IPO placement of equity shares or compulsorily Convertible preference shares for financing its expansion plans.
Deutsche Bank also received the ministry’s nod to acquire around 5 per cent equity stake in the Delhi Stock Exchange.
Arcelor Mittal India Ltd, Indiabulls Power Generation Ltd., Mumbai and Demerara Distilleries proposals to convert their respective operating companies into an operating cum holding companies for making further downstream investments.
Havells Proposal Cleared with a Rider
Earlier in the month, the Foreign Investment Promotion Board (FIPB) cleared Havells India’s proposal for infusing equity shares and warrants worth Rs 278 crore into its Indian venture. However, the clearance came with a rider that the company will have to obtain licence from the Department of Industrial Policy And Promotion (DIPP) and undertake 50 per cent export obligation on manufacturing items reserved for the small-scale sector.
DIPP Issues Press Note 7
In another development, on 16 June 2008, the Department of Industrial Policy & Promotion under the ministry of commerce issued Press Note 7 consolidating the policy and regulations governing FDI in India, including the policy review undertaken in January. The release added that prior government approval for FDI is required where more than 24 per cent foreign equity is proposed to be inducted for manufacturing items reserved for the small scale sector.
The Press Note lists sectors such as retail, atomic energy, lottery, gambling and betting, business of chit fund and trading in transferable development rights where foreign investment is not permitted. It also specifies conditions like FDI limit and criteria for foreign firms to invest in domestic sectors like power, banking, agriculture, manufacturing, retail, broadcasting and non-banking finance companies.
Source: ProjectsToday.com