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TMI BlogForeign Direct Investment (FDI) in India - Transfer of Shares/Preference Shares/Convertible Debentures by way of Sale - Revised pricing guidelinesX X X X Extracts X X X X X X X X Extracts X X X X ..... FEMA 20/2000-RB dated May 3, 2000 , as amended from time to time. 2. In terms of Schedule 1 of the Notification, an Indian company may issue equity shares/compulsorily convertible preference shares and compulsorily convertible debentures (equity instruments) to a person resident outside India under the FDI policy, subject to inter alia, compliance with the pricing guidelines. Further, in terms of the A. P. (DIR Series) Circular No.16 dated October 4, 2004 and A. P. (DIR Series) Circular No. 63 dated April 22, 2009 , general permission is available for transfer of equity instruments, by way of sale, from residents to non-residents (including transfer of subscriber's shares) of an Indian company in sectors other than financial service se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contents of this circular to the notice of their constituents and customers concerned. 7. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (Salim Gangadharan) Chief General Manager-in-Charge Annex-I [Annex to A. P. (DIR Series) Circular No. 49 dated May 4, 2010 Paragraph No. [cf. A.P.(DIR Series) Circular No. 16 dated October 4, 2004 ] Existing Provisions Revised Provisions 2.2 Transfer by Resident to Non-resident (i.e. to incorporated non-resident enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ker / Chartered Accountant. 2.3 Transfer by Non-resident (i.e. by incorporated non-resident entity, erstwhile OCB, foreign national, NRI, FII) to Resident. Transfer by Non-resident (i.e. by incorporated non-resident entity, erstwhile OCB, foreign national, NRI and FII) to Resident Sale of shares by a non-resident to resident shall be in accordance with Regulation 10 B(2) of Notification No. FEMA 20/2000-RB dated May 03,2000 which is as below: Price of shares transferred by way of sale, by non-resident to resident shall not be more than the minimum price at which the transfer of shares can be made from a resident to a non-resident as given in para 2.2 above. a) Where the shares of an Indian company ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r per company, at a price mutually agreed to between the seller and the buyer, based on any valuation methodology currently in vogue, on submission of a certificate from the statutory auditors of the Indian company whose shares are proposed to be transferred, regarding the valuation of the shares, and ii) if the amount of consideration payable for the transfer exceeds Rs.20 lakh per seller per company, at a price arrived at, at the seller's option, in any of the following manner, namely: A) a price based on earning per share (EPS) linked to the Price Earning (P/E) multiple ,or a price based on the Net Asset Value (NAV) linked to book value multiple, whichever is higher, or B) the prevailing market price in small lots as ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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