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From Father India to Mother India One down, one to go What’s the fallout for 2014? A spectacular Shanghai show We pull each other down needlessly... Breakthrough Budget Mysuru – India’s cleanest city Business wanted Modi as PM. It’s time to back up. The helpless voter Science diplomacy: bridge the world through science AKKINENI NAGESWARA RAO Ooh la la... Netherlands to join India in Make India campaign and Smart City projects Matchless at 70 Vibrant show by corporates Electricity finance reform at last Foreign Investors’ get major relief from RBI Speed up the railways India Inc excited about Modi’s elevation Spate of disinvestments by private sector too! 250 days of Modi government Happening Haryana It is attracting investments, stupid! Guzarathukars and Palkarars of Erode... Selective lobby session with Jaitley... Union Budget: Voices Hey, CAs. Be more vigilant. The religion named Football Whose money is it anyway? Scientists’ responsibility to society Demonnetisation or demonisation? Service or dis-service Take a cue from western partners Case for phasing out LPG subsidy... Brilliant Saeed Saab ‘Big ideas’ of Modi… Less government, better governance… No lessons learnt JAM – Jan Dhan, Aadhaar and Mobile The national power grid at last! In paper? Or in action?
 
Foreign Investors’ get major relief from RBI

In a major sop to foreign investors, the Reserve Bank of India (RBI) relaxed certain investment rules allowing Indian companies to sell partly paid shares or warrants to foreign investors. These are securities for which a buyer makes a partial payment in the first instance and pays up the remaining amount at a later date when the company requires.

According to the relaxed rules, the pricing of the partly paid up equity shares are to be determined upfront and 25 per cent of the total consideration amount shall also be received upfront. This includes share premium. And the balance consideration towards fully paid up equity shares has to be received within a year. The Central bank clarified that the time period for the balance amount for the partly paid up shares will not be insisted upon if the issue size exceeded Rs 500 crore. For warrants issued by companies the foreign investor will however have an 18 month period for paying the balance amount.

The benefit under the new rule is that the Indian company can get a higher price than the fair value computed at the time of the issuance of the warrants but is insulated from the price being lowered.

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