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CS Professional · Strategic Management and Corporate Finance · Foreign Funding - Institutions

Under the FEMA non-debt instruments rules, what is the aggregate limit for all FPIs together in the paid-up equity capital of an Indian listed company, unless the company lowers it by board and shareholder approval?

The aggregate limit for all FPIs in a listed Indian company is the applicable sectoral cap, unless the company lowers it through board and shareholder approval. The 10% figure applies to an individual FPI, not to FPIs in aggregate.

  1. ASectoral cap applicable to that companyCorrect
  2. B24% of paid-up capital
  3. C10% of paid-up capital
  4. D49% of paid-up capital in every case

Explanation

The aggregate FPI limit is the applicable sectoral cap for the company. Earlier, a fixed 24% default applied, but now the sectoral cap governs, and the company may reduce it to a lower threshold through board and special resolution. 10% is the single-FPI limit, not the aggregate.

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