Foreign Investors In Indian Real Estate Locked For Three Years - March 25, 2009

Overseas investors in Indian real estate cannot sell their stakes before three years to another foreign investor, the Foreign Investment Promotion Board (FIPB), the body that clears such proposals, said.

Along with this, FIPB has ruled against a provision in FDI policy that excused foreign players from the rule in cases where fund transfer is from one non-resident to another. Until now, this three-year lock-in was applicable only on foreign investment in real estate and not on investors.

According to the FIPB, the stand taken by the department of industrial policy and promotion (Dipp), the nodal agency that formulates FDI rules in the country. Dipp’s view is that a foreign investor can send back funds if it divests its stake to another foreign investor as the actual investment in a project would remain intact and only its ownership would change.

“Though Press Note 2 of 2005 has an enabling clause to permit sale of investment between two non-residents before the end of lock in, it has not been allowed so far,” a senior official in the commerce and industry ministry said.

The issue came up in the last FIPB meeting, when the board took up private equity fund 2I Capital’s request to sell its investment in Delhi-based real estate firm Uppal Housing to Mauritius-based fund ICP Investments.

Gold Remains Unchanged - Feb 21, 2009

Gold remained unchanged at Rs 15,700 per 10 gram as retailers and stockists renounced buying at record high levels with the reports that metal remain high on the abroad. However, silver coins went up in New Delhi on sustained buying by stockists on the marriage season. Marketmen said there people postponed their decision of buying for the current marriage season.

In the overseas markets, gold recorded a moderate fall last evening before recovering to unchanged levels of 984 dollar an ounce. While gold in overseas markets jumped to its highest in seven months at 988.40 dollar an ounce, the metal rose to a record of Rs 15,800, a level never seen before.

Traders said there was some token buying of silver coins in this marriage season for gifting purpose, which kept prices rising. Silver coins rose further by Rs 100 to Rs 28,700 for buying and Rs 28,800 for selling of 100 pieces.Silver ready edged up Rs 20 to Rs 22,520 per kg. However, silver weekly-based delivery fell by Rs 80 to Rs 22,920 per kg on lack of support from speculators. Standard gold and ornaments were unchanged at Rs 15,700 and Rs 15,550 per 10 gram, respectively. Sovereign also remained at Rs 12,300 per piece of eight gram.