RBI green signals FIIs to buy Pantaloon shares

The RBI has allowed FIIs to buy shares in Pantaloon Retail as the foreign shareholding

in the Future Group firm dived below the prescribed limit. Removing Pantaloon from its ban list, RBI has said that the foreign share-holding by Foreign Institutional Investors (FIIs) in Future Retail (Pantaloon Retail) has gone below the prescribed threshold limit under the FDI policy.

“Hence, the restrictions placed on the purchase of shares of the above company are withdrawn with immediate effect,” the RBI said in a notification. Earlier in January this year, RBI had placed restriction on FIIs to purchase shares in Pantaloon Retail as the foreign shareholding had crossed the overall permissible limit of 24 percent of paid-up capital.

FIIs, NRIs and PIOs (Persons of Indian Origins) are allowed to invest in the primary and secondary capital markets in India through Portfolio Investment Scheme (PIS). RBI monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis. To effectively monitor the limit, RBI has fixed cut-off points two percentage points lower than the actual ceilings.

Aditya Birla Nuvo, after picking majority stake in the Pantaloon chain in April 2012, previously owned by Kishore Biyani’s Future Group, plans to invest around Rs 20 crores per new store opening. Keeping the growth momentum and rise in consumer awareness in smaller towns in mind, the new stores would focus on Tier II towns across India. Plans are also afoot to open independent outlets of its ‘power house brands’.