Mumbai: The Reserve Bank has allowed foreign investors to hold up to 50 per cent equity holding in financial services firm Capital First.
The company has passed a resolution that has mandated the hike in limit of investment from foreign institutional investors (FIIs) and foreign portfolio investors (FPIs) to 50 per cent, from the 24 per cent earlier.
Due to the increase in the investment limit, it is notified that the aggregate shareholding by FIIs/FPIs in Capital First has gone below the prescribed investment limit for the company.
"Hence, the restrictions placed on the purchase of shares of the above company by FIIs and FPIs... are withdrawn with immediate effect," RBI said in a notification.
FIIs, NRIs and PIOs (Persons of Indian Origin) can invest in primary and secondary capital markets in India through PIS (portfolio investment scheme).
The RBI monitors the ceilings on FII, NRI and PIO investments in Indian companies on a daily basis and has fixed the cut-off points two percentage points lower than the actual ceiling. Stock of Capital First closed 4.67 per cent higher at Rs 808.30 on the BSE on Tuesday.