During June 2008, the Union Finance Ministry cleared 13 Foreign Direct Investment (FDI) proposals, amounting to Rs.1,525 crore. Two of the 13 proposals cleared were of large size, proposed by Golboot Holdings, Cyprus and India Rizing Fund, Mumbai.
Golboot Holdings, Cyprus, showed interest in investing Rs.700 crore in Indian companies, by subscribing to unsecured fully and compulsorily convertible debentures. India Rizing Fund, Mumbai, has proposed to invest in defense SME, by accepting contributions from overseas investors and issuing units against the subsequent money received. Of the remaining 11 proposals cleared, some notable names came forth.
Gayatri Infra Ventures plans to induct Rs.200 crore (up to 49 per cent) of foreign equity in downstream investment. Apollo Health Street’s proposal involves investment of around Rs.61 crore through pre-IPO placement of equity shares or compulsorily convertible preference shares, for funding its expansion plans. Deutsche Bank’s proposal met with approvals from the Ministry, to acquire around 5 per cent equity stake in the Delhi Stock Exchange.
Arcelor Mittal India, Indiabulls Power Generation, Mumbai, and Demerara Distilleries, have been given the nod to convert their respective operating companies into operating-cum-holding companies, for further downstream investments.
Besides the 13 proposals cleared by the Ministry, the Foreign Investment Promotion Board (FIPB) also gave Havells India the go ahead to infuse equity shares and warrants worth Rs 278 crore in its Indian venture. However, the clearance was tagged with a rider that the company will have to obtain license 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.
In another development, on 16 June 2008, the DIPP under the Ministry of Commerce issued Press Note 7 consolidating the policy and regulations governing FDI in India, including policy review undertaken in January. The release added that prior government approval is necessary for FDI 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 & 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.
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