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| Investment in Existing Companies |
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| Foreign companies can take equity in existing Indian companies in accordance with the same guidelines as applicable to fresh investments. However, for such investment to qualify under the automatic route, the foreign equity must result in an expansion of business plans and/ or an increase in equity share capital of the Indian invested company. In all other cases, including a restructuring of equity among existing shareholders, specific approval is required. The issue of shares for such investments is governed by specific regulations: |
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The price shall not be below the Fair Value of the Share as determined and certified by an independent Chartered Accountant; |
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The application must be accompanied by a Board Resolution of the Indian Company and consent letter of the Indian partner/ foreign collaborator; and |
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A Shareholders’ special resolution (requiring three-fourths majority) in favour of the allotment in case of public limited companies |
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ICREON