The Reserve Bank of India in its another measure to prop up rupee and bring more Foreign Direct Investment (FDI) in the country, has hiked the limit for foreign investment in Asset Reconstruction Companies (ARCs) to 74 percent from the earlier cap of 49 percent. The decision of the central bank follows Cabinet decision earlier this month to liberalise FDI norms in various sectors.
As per the RBI notification "The ceiling for FDI in ARCs has been increased from 49 percent to 74 percent subject to the condition that no sponsor may hold more than 50 percent of the shareholding in an ARC either by way of FDI or by routing through a foreign institutional investors (FII)". The foreign investment limit of 74 percent in ARC would be a combined limit of FDI and FII.
Further, the apex bank has allowed the FIIs to invest in Security Receipts (SRs) up to 74 percent of each tranche of scheme of SRs issued by the ARC. The banks circular stated that the individual limit of 10 percent for investment of a single FII in each tranche of SRs issued by ARCs may be dispensed with. Such investment should be within the FII limit on corporate bonds prescribed from time to time, and sectoral caps under the extant FDI Regulations should be complied with.
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: