Foreign Companies Can Hold 15% In Stock, Commodity Exchanges

New Delhi: In a move to attract more overseas capital, the government on Wednesday allowed foreign companies to own up to 15 per cent in domestic stock or commodity exchanges as against five per cent currently.

The decision regarding this was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi.

"The Cabinet has given its approval for raising foreign shareholding limit from 5 per cent to 15 per cent in Indian stock exchanges," an official spokesperson said in a tweet.

The Cabinet has also cleared the proposal to allow foreign portfolio investors (FPIs) to acquire shares through initial allotment in stock exchanges.

The move would help in global competitiveness of Indian stock exchanges by adoption of the latest technology and global best practices, the spokesperson said.

The decision is aimed at attracting more foreign inflows in bourses like BSE and National Stock Exchange. 

The approval is a follow-up to the announcement made by Finance Minister Arun Jaitley in his 2016 Budget speech.

"Investment limit for foreign entities in Indian stock exchanges will be enhanced from 5 per cent to 15 per cent on par with domestic institutions. This will enhance global competitiveness of Indian stock exchanges and accelerate adoption of best-in-class technology and global market practices," he had said.