RBI allows Apollo Tyres to raise FII investment cap to 40%

The Reserve Bank today allowed Apollo Tyres to increase FII investment limit under the Portfolio Investment Scheme (PIS) to 40 per cent.

"RBI today notified that Apollo Tyres has passed resolutions at the board of directors' level and a special resolution by the shareholders, to enhance the limit for purchase of its equity shares and convertible debentures by Foreign Institutional Investors through primary market and stock exchanges, under the Portfolio Investment Scheme up to 40 per cent of paid up capital," the bank said in a release.

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As per the current norms, RBI needs to be intimated in case FII investment limit in a company breaches a certain cap. FIIs, NRIs and PIOs (Persons of Indian Origin) are allowed to invest in the primary and secondary capital markets in India under the PIS.

Under this scheme, FIIs/NRIs can acquire shares or debentures of Indian companies through the stock exchanges. The ceiling for overall investment for FIIs is 24 per cent of the paid up capital of the Indian company and 10 per
cent for NRIs/PIOs.

The ceiling of 24 per cent for FII investment can be raised up to sectoral cap/statutory ceiling, subject to the approval of the board and the general body of the company passing a special resolution to that effect.