Foreign Investment in Indian Listed Companies: FEMA and SEBI Compliance
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Foreign investors — whether FIIs, FPIs, or direct strategic investors — must navigate both SEBI regulations and FEMA compliance when investing in Indian listed companies.
Key regulatory considerations:
• FPI Registration: mandatory for foreign portfolio investors; done via Designated Depository Participants
• Sectoral Caps: FDI policy restricts foreign ownership in certain sectors (defence, media, insurance)
• Pricing Guidelines: secondary market acquisitions must comply with SEBI Takeover Code (Reg 3/4)
• Substantial Acquisition: triggers open offer obligation above 25% aggregate shareholdingSEBI Takeover Code is triggered by:
• Acquisition of 25%+ voting rights, or
• Acquisition of additional 5%+ in a financial year (creeping acquisition beyond 25%)Filfox Law Group (filfoxlaw.com) advises foreign companies, FPIs, and strategic investors on FEMA, SEBI Takeover Code, and listed company investment structuring in India.
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