Foreign investments through preference shares to be share capital

New Delhi, Apr 30 (UNI) The Ministry of Finance today said foreign investment coming as fully convertible preference shares would be treated as part of share capital.

It would be included in calculating foreign equity for purposes of sectoral caps on foreign equity, where such caps have been prescribed, the Ministry said in a statement unveiling the new guidelines.

Foreign investment coming as any other type of preference shares (non- convertible, optionally convertible or partially convertible) would be considered as debt and shall require conforming to ECB guidelines/ECB caps, the statement said.

Any foreign investment as non-convertible or optionally convertible or partially convertible preference shares as on and up to today would continue to be outside the sectoral cap till their current maturity.

Issue of preference shares of any type would continue to conform to the guidelines of RBI/SEBI and other statutory bodies and would be subject to all statutory requirements, the statement added.

UNI