NEW DELHI, Sept 28: The Foreign Investment Promotion Board (FIPB) will take up 26 FDI proposals, including that of HDFC Bank and Punj Lloyd, on Wednesday.
The other proposals before the FIPB include Holcim (India) Pvt Ltd, O-zone Networks Pvt Ltd and Turner General Entertainment Networks.
As per the agenda before the board, headed by Finance Secretary Arvind Mayaram, there are seven Foreign Direct Investment (FDI) proposals from the pharmaceutical sector.
The pharma firms which have approached the FIPB include Sun Pharmaceutical Industries, Panacea Biotech and Sanofi- Synthelabo.
While the proposal of Punj Lloyd pertains to the defence sector, another company IdeaForge Technology has also applied for FDI in the sector.
HDFC Bank’s proposal for increasing the foreign holding in the bank to 67.55 per cent from 49 per cent has been pending before the FIPB since late last year.
The Department of Economic Affairs and Department of Industrial Policy & Promotion are of view that promoter HDFC Ltd’s 22.56 per cent stake in HDFC Bank is foreign investment.
Hence, if the proposal of the bank to raise foreign investment to 67.55 per cent is accepted, it would exceed the cap of 74 per cent, after taking into account parent HDFC Ltd’s stake.
Foreign entities, including FIIs, hold more than 77.36 per cent in HDFC Ltd, while the foreign holding in a bank cannot exceed 74 per cent as per the existing norms.
At the end of June 2014, foreign institutional investment (FII) in HDFC Bank was 33.93 per cent, according to BSE data. Further, foreign investors hold another 16.90 per cent shares through ADRs and GDRs.
If the promoter’s (HDFC Ltd) stake of 22.56 per cent is deemed to be foreign, then the total of the above mentioned three categories would take foreign investment to over 74 per cent.
FDI, FII, NRI holding, ADR/GDR, convertible preference shares, foreign currency convertible bonds are treated as foreign investment under the FDI policy.
Investments by HDFC Ltd and associate companies, in HDFC Bank were made before 2009, when the government came out with norms to calculate the level of foreign investment in companies. (PTI)
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