Important Points for IC 99 - Asset Management Exam
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Indian company may receive Foreign Direct Investment under the following two routes : Automatic route and Government route
Foreign investment is reckoned as FDI only if the investment is made in : Equity shares, Fully and manadatorily convertible preference shares and, Fully and manadatorily convertible debentures
The Government of India has amended FDI policy to increase FDI inflow. In 2016, the government increased foreign investment upper limit from 26% to 49% in insurance sector.
FCCBs can be issued by Indian companies in the overseas market in accordance with the Scheme for Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993. The FCCB being a debt security, the issue needs to conform to the External Commercial Borrowing guidelines, issued by RBI vide Notification No. FEMA 3/2000 - RB dated May 3, 2000 as amended from time to time.
Euro issue means modes of raising funds by an Indian company outside India in foreign currency. There are different modes of Euro issue which is as follows : Foreign Currency Convertible Bonds (FCCB), Depository Receipts : (a) Global Depository Receipts (GDRs) and (b) American Depository Receipt ("ADR")
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