Mumbai: Infrastructure financing company IDFC has agreed to prune foreign shareholding limit by 1 per cent to 50.50 per cent, as part of plans to progressively pare foreign investor holding to 49 per cent to run banking services.
“…IDFC Limited has agreed to decrease the limit for purchase of its equity shares and convertible debentures by Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs), through primary market and stock exchanges under the Portfolio Investment Scheme (PIS) up to 50.50 per cent of the paid up capital,” the RBI said in a notification.
On July 8, the company had agreed to pare the FII investment ceiling to 51.5 per cent.
The company, which received a commercial banking licence in April, plans to start bank operations by October next year.
“IDFC was placed in ban list for FIIs/RFPIs on July 8, 2014 and continue to remain in that list,” the RBI added.
Regulations require a bank should be floated by a domestic entity and it should pare foreign investor holding to 49 per cent to run banking services.
FIIs, NRIs and PIOs (Persons of Indian Origins) can invest in primary and secondary capital markets in India through Portfolio Investment Scheme (PIS).
The RBI monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis.
Shares of the company today closed 8.7 per cent higher at Rs 163.05 per scrip on the BSE