The Reserve Bank of India (RBI) said non-resident Indians (NRIs) are restricted from buying further shares in Asian Hotels (West) Ltd as the allowed limit of 10 per cent has been breached.
Foreign shareholding in the company by NRIs has breached the limit of 10 per cent of its paid up capital, RBI said in a notification. "Therefore, no further purchases of shares of this company would be allowed through Stock Exchanges in India on behalf of NRIs," it said.
FIIs (Foreign Institutional Investors), NRIs and PIOs (Persons of Indian Origin) can invest in primary and secondary capital markets in India through Portfolio Investment Scheme (PIS).
RBI monitors ceilings on FII/NRI/PIO investments in Indian companies on a daily basis. Stocks of Asian Hotels (West) closed 6.26 per cent down at INR167.70 on BSE.
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 limit is 20 per cent of the paid up capital in the case of public sector banks, including the State Bank of India.
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. And the ceiling of 10 per cent for NRIs/PIOs can be raised to 24 per cent subject to the approval of the general body of the company passing a resolution to that effect.
Once the aggregate net purchases of equity shares of the company by FIIs/NRIs/PIOs reach the cut-off point, which is 2% below the overall limit, the Reserve Bank cautions all designated bank branches so as not to purchase any more equity shares of the respective company on behalf of FIIs/NRIs/PIOs without prior approval of the Reserve Bank.