RBI opens gates for investors, companies to invest in overseas funds

NEW DELHI, June 9: Investors and companies based in India will now be able to invest in overseas funds, including those set up in the United States and Singapore, without any restrictions. The move follows an amendment by the Reserve Bank of India (RBI) last week regarding Overseas Portfolio Investments (OPIs).

The RBI on Friday issued a circular amending the Foreign Exchange Management (Overseas Investment) Directions, 2022, lifting several restrictions.

The amendments remove restrictions, which permitted Indian Limited Partners (LPs) to invest only in units issued by overseas funds. Now, investment is allowed in any instrument, regardless of its form whether in units or not.
The changes do away with the condition that the investment could only be made in funds that were directly regulated by the financial regulator of the host country and not those regulated through their investment managers (IMs).

For instance, regulators in Singapore and the US (for some cases), regulate the fund manager rather than the fund.

"These were much-awaited clarifications. Post issuance of the OI directions, resident Indian individuals were not able to honour their capital calls received from certain overseas funds, including exempt funds in the US and the venture capital companies in Singapore. Such funds should now be able to receive funds from resident individuals, subject to satisfying the AD banks, either under law or by way of documentation, that their activities are regulated in the home country through their registered/ regulated IMs,” said Prakhar Dua, lead, Financial Services and Regulatory Practice, Nishith Desai Associates.

Industry experts said that owing to the restrictions, new funds had to be set up in jurisdictions such as Cayman Islands and Mauritius to ensure that investments from Indian LPs would be possible.

Additionally, the regulatory change will also give General Partners the flexibility to establish their funds in commercially favourable jurisdictions without having to worry about whether Indian investments would be permitted.

“RBI’s move would offer resident Indian investors and corporates a choice to invest in a Singapore-domiciled fund directly thereby taking advantage of its global fund management expertise and reputation of a world-class, stable investment jurisdiction. Investors could also benefit from the wide variety of funds that in turn invest into different assets classes such as real estate, private equity, credit, and so on,” said Anand Singh, founder, Elios Financial Services and a member of Capital Market Task Force, FSC Mauritius.

The norms will also remove the ambiguity around the fund being set up as trusts, companies, and partnerships.

Adani Ports shares slip 16% from all-time high

MUMBAI, June 6: Shares of Adani Ports and Special Economic Zone Ltd (Adani Ports) on Thursday shed 0.18 per cent to settle at Rs 1,352.80.

At this price, the stock has declined 15.87 per cent from its record high of Rs 1,607.95, a level seen earlier this week on June 3.

GST Collections In May Reach Rs 1.73 Lakh Crore

NEW DELHI, June 1: The gross Goods and Services Tax collections increased 10% year-on-year to Rs 1.73 lakh crore in May, according to a release by the Finance Ministry on Saturday.

The May figures were driven by a strong increase in domestic transactions at 15.3% and a slowing of imports by 4.3%. After accounting for refunds, the net GST revenue for May stands at Rs 1.44 lakh crore, reflecting a growth of 6.9% as compared with the same period last year.

Historically, following the mop-up in April, May collections tend to be much lower in comparison, as they are reflective of revenue collections for transactions conducted in April—the first month of the fiscal.

GST collections in April crossed the Rs 2-lakh-crore mark for the first time, since the rollout of the indirect tax reform in July 2017. GST collections are released with a one-month lag. According to the release, the GST revenue collection in FY25—including the highest ever collection in April—stands at Rs 3.83 lakh crore.

GDP Grows 7.8% In March Quarter, Pushes India's Annual Growth Rate To 8.2%

NEW DELHI, June 1: India's economy grew 7.8 per cent in the March quarter, pushing up the annual growth rate to 8.2 per cent, according to official data released today.

Growth in the January-March period was lower than the 8.6 per cent expansion in the December quarter.

The gross domestic product (GDP) had expanded 6.2 per cent in the January-March period of the 2022-23 fiscal year, according to data released by the National Statistical Office (NSO).

As per the data, the economy expanded 8.2 per cent in 2023-24 against a 7 per cent growth in 2022-23.

The NSO in its second advance estimate of national accounts had pegged the country's growth at 7.7 per cent for 2023-24.

China has registered an economic growth of 5.3 per cent in the first three months of 2024.

Top 100 companies to verify market rumours promptly starting June 1

MUMBAI, June 1: The top 100 listed companies by market capitalization will have to confirm or deny any market rumour reported in the mainstream media from this Saturday.

The rule will be applicable for top 250 companies from December 1.

Under the Sebi's rule, these companies will have to 'confirm, deny, or clarify any reported event or information in the mainstream media that is not general in nature and that indicates that rumours of an impending specific material event' are circulating amongst the investing public within 24 hours from the reporting of the information.

Sebi through its newly introduced rumour verification framework has excluded the price volatility in arriving at average market price for the purpose of corporate actions in a bid to make it fair for all investors at large.