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India steps up QFI drive to attract Gulf HNIs
Issac John / 20 August 2012
India, which is currently among the world’s top three investment destinations, is stepping up its drive to lure high networth investors from the Middle East in the wake of an overwhelming response its path breaking initiative — Qualified Foreign Investor regime — has been generating.
The Securities Exchange Board of India, SEBI, at the beginning of this year allowed qualified foreign investors, QFIs, to directly invest in the Indian equity market in a bid to boost foreign inflows. In line with the new drive that targets to lure between $80 billion and $90 billion to the country over the next two years, India has granted individuals and corporates from over 45 countries, including UAE, QFI status.
Since then, the response from prospective investors in the Middle East has been encouraging. To build on the momentum, IBMC International is organising an international seminar and launch ceremony of QFI services for the high networth individual investors/corporate on September 1 in Dubai, said Sajith Kumar P K, chief executive of IBMC Group.
The event is being organised with the objective of spreading the message of QFI route of investments to the global investing public from the world’s business hub — Dubai, said Hazza Mohammed Al Dhaheri, Chairman, IBMC Group.
Senior officials from India, who will be addressing the session, include Ashishkumar Chauhan, CEO Bombay Stock Exchange, P. S Reddy, CEO & M.D, Central Depository Services (India) Limited, S. Rengarajan, CEO, IL&FS Securities & Services Ltd, Sanjay Verma, Consul General, Consulate General of India in Dubai.
Kumar said residents of 45 countries are currently eligible to be Qualified Foreign Individual Investors. These include Australia, Austria, Bahrain, Belgium, Brazil, Bulgaria, Canada, China, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Italy, Japan, Republic of Korea, Lithuania, Luxembourg, Malta, Mexico, the Netherlands, New Zealand, Norway, Oman, Poland, Portugal, Romania, Russia, Saudi Arabia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, the UAE, the UK and the US.
Explaining QFI regime, Kumar said under this category, foreign nationals can invest directly in the Indian Market. Earlier, only pension funds and similar entities were allowed direct access to India’s bourses. QFI is an investor, who meets criteria of SEBI and is allowed to invest in stock exchanges and depositories in India. Qualified foreign investors shall include individuals, groups or associations.
In 2011, India government opened a new window for this class of investors to buy into Indian mutual funds directly. This year, it went one step further and allowed them to buy into stocks.
He said QFIs will be distinct from foreign portfolio investors and non-resident Indians. A QFI can, for instance, be a foreign individual investor in Singapore or Russia, who can buy into stocks of a Tata group company or Coal India or any other listed stock after fulfilling the Know Your Customer norms through an Indian depository participant and obtaining the approval of the RBI.
QFIs can buy up to five of the paid-up capital of a company, with the overall limit capped at 10 per cent in a company. And these investment limits are separate or over and above that for FIIs and NRIs.
In June, a high-level Indian delegation led by R. Gopalan, Secretary of the Department of Economic Affairs, was in Dubai as part of a GCC road show titled, “India: The Incredible Investment Destination” to woo Arab and expatriate investors through the QFI route.
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