Can a private limited entity raise FDI

ROBIN JI,

AS PER (Secretariat for Industrial Assistance),Department of Industrial Policy and Promotion

Ministry of Commerce and IndustryGovernment of India,New Delhi POLICY IN ABOVE SAID PARA

(b) Existing Companies

2.3 Besides new companies, automatic route for FDI/NRI/OCB investment is also available to

the existing companies proposing to induct foreign equity. For existing companies with an

expansion programme, the additional requirements are that (i) the increase in equity level must

result from the expansion of the equity base of the existing company without the acquisition of

existing shares by NRI/OCB/foreign investors, (ii) the money to be remitted should be in foreign

currency and (iii) proposed expansion programme should be in the sector(s) under automatic

route. Otherwise, the proposal would need Government approval through the FIPB. For this the

proposal must be supported by a Board Resolution of the existing Indian company.

2.4 For existing companies without an expansion programme, the additional requirements for

eligibility for automatic approval are (i) that they are engaged in the industries under automatic

route, (ii) the increase in equity level must be from expansion of the equity base and (iii) the

foreign equity must be in foreign currency.

2.5 The earlier SEBI requirement, applicable to public limited companies, that shares allotted on

preferential basis shall not be transferable in any manner for a period of 5 years from the date of

their allotment has now been modified to the extent that not more than 20 per cent of the entire

contribution brought in by promoter cumulatively in public or preferential issue shall be locked-in.

2.6 The automatic route for FDI and/or technology collaboration would not be available to those

who have or had any previous joint venture or technology transfer/trade mark agreement in the

same or allied field in India.

THX