NISM Certifications · NISM-Series-VI: Depository Operations · Foreign Portfolio Investors (FPI)

An FPI holds equity shares of an Indian company. Under the FEMA-based framework applicable to FPIs, which limit applies to the aggregate holding of all FPIs in the company, and what happens if an FPI breaches the single-FPI-group investment threshold of 10% of the total paid-up equity capital?

If an FPI or investor group crosses the 10% single-holding limit, it must divest the excess within five trading days or have the holding reclassified as FDI, subject to FDI conditions. Aggregate FPI limits also apply company-wise.

1. AAggregate FPI limit applies; the FPI must divest the excess within five trading days or the holding is reclassified as FDICorrect
2. BAggregate FPI limit applies; the excess is simply frozen for one year with no further action
3. CNo aggregate limit applies; the excess is forfeited to SEBI
4. DAggregate limit applies; the FPI must report to the company only and nothing changes