The Reserve Bank of India on Monday said partly paid equity shares and warrants issued by an Indian company in accordance with the provision of the Companies Act, 2013 and the SEBI guidelines, as applicable, will be eligible instruments for the purpose of Foreign Direct Investment and foreign portfolio investment by Foreign Institutional Investors / Registered Foreign Portfolio Investors subject to compliance with FDI and FPI schemes.
The company, while issuing partly paid shares or warrants, has to ensure that sectoral caps are not breached even after the shares get fully paid-up or warrants get converted into fully paid equity shares. The RBI said an Indian company whose activity/ sector falls under the Government route would require prior approval of the Foreign Investment Promotion Board (FIPB), Government of India for issue of partly-paid shares/ warrants.