Ministry of Finance facilitates bonus shares issues by companies in the FDI-Bard sector

The finance ministry has improved the rules engaged in the areas where Indian companies have banned foreign direct investment (FDI), allowing bonus shares to their pre-existing non-resident shareholders.

However, even after the bonus share issue, such shareholders must remain unchanged, the ministry said that when indicating the Foreign Exchange Management (Non-DAT instruments) (improvement) rules, 2025. The new rules are implemented from June 11.

Experts said the move would allow companies to go for equity restructuring and improve capital management without breaking the existing FDI policy.

The notification was given in April after the FDI policy announced a similar relief in the FDI policy in April in April.

The ministry has now made a change by introducing a new sub-rule in Foreign Exchange Management (Non-DET Instruments) Rules, 2019.

The instruction also states that any bonus shares given to such shareholders before the start date of this sub-rule will be considered to be issued in accordance with the provisions of these rules. ”Or some other relevant rules.

This step is part of the widespread government efforts to further liberalize equity investment rules to enable India to attract more foreign capital.

Sandeep Zunzunwala, Sandeep Zunzunwala, partner of Nangia Anderson LLP, said that the instructions make it clear that “even the bonus issues made in the past (even) will gain the precursor of this obvious improvement”.

The purpose of eliminating any ambiguity of the precedent application of the comfort presented by DPIIT in April in the FDI policy, he added, he added. Blurry due to the fact that FDI rule changes are usually applied.

Finance Secretary Ajay Sheth told ET in February that the Finance Ministry and the Reserve Bank of India F India are in discussions to simplify the rules of foreign exchange, especially in terms of non-debt equipment and update them on modern standards.

Given that the field-specific limitations for FDI have already been relaxed, the government is focusing on simplifying the restricted rules for foreign investors among global headwinds.

After scaling the top of the billion billion billion billion in FY 22, the total FDI flow in India dropped to $ 71 billion in FY 24 in two years. Billion in the last financial year again rose to $ 81 billion.