New Delhi: Government has said there are no restrictions on Foreign Institutional Investors (FIIs) to invest in the initial public offers of DLF, Parsvnath or other real estate companies.
The government's response comes in wake of DLF and Parsvanath seeking clarification from the Ministry of Industries on whether or not FIIs were permitted to make investments.
The Ministry responding to their letters has written that guidelines will be applicable only on Foreign Direct Investment (FDI) and not on FII.
As per current norms for the Indian real estate sector, 100 per cent FDI is allowed with certain conditions.
The minimum area to be developed for each project is 25 acres and the minimum capital investment for wholly-owned subsidiaries is 10 million dollars. And it’s five million dollars for joint ventures.
The original investment can be fully repatriated after three years. Though the FIIs can invest in the IPO, but if they make any investment in these companies pre-issue it will attract
FDI guidelines, which these companies will have to adhere to.
While DLF group says it hopes to raise more than Rs 10,500 crores from the largest ever public issue in June, Parsvanath is expected to raise about Rs 1,700 crores.
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