INDIA: Increase in India foreign investment in corporate bonds

Monday April 4 2011

The Securities and Exchange Board of India has announced that the existing limit of USD 5 billion for investment by foreign Institutional investors (FIIs) in corporate bonds issued by companies in the infrastructure sector with a residual maturity of over five years has been increased by an additional limit of USD 20 billion taking the total limit to USD 25 billion in connection with India foreign investment.

In addition, India FIIs are now eligible to invest in unlisted bonds issued by companies in the infrastructure sector that are generally organised in the form of special purpose vehicles. Investments in such bonds shall have a minimum lock-in period of three years. However, during the lock-in period, FIIs will be allowed to trade amongst themselves (investments cannot however, be sold to domestic investors).Click on the above link for more details.