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

An FPI holds shares of an Indian listed company. Under the FPI Regulations and FEMA rules, what is the general limit on investment by all FPIs together in a company, unless the company's board and shareholders approve a different limit up to the sectoral cap?

The default aggregate limit for all FPIs together is the sectoral cap or statutory limit applicable to the Indian company. The earlier 24% default has been replaced, while the 10% limit applies to an individual FPI's holding in a company, not to the aggregate.

  1. AAggregate FPI limit of 24% of paid-up equity capital by default for all sectors
  2. BAggregate FPI limit equal to the applicable sectoral cap, by defaultCorrect
  3. CAggregate FPI limit of 10% for all sectors
  4. DNo limit at all

Explanation

Currently the default aggregate FPI limit is the sectoral cap or statutory ceiling applicable to the company, and the company may reduce it by a board and shareholder resolution before a set date. The old 24% default no longer applies. The 10% limit applies to a single FPI.

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