Friday, March 14, 2008

Foreign Direct Investment and Foreign Institutional Investors in Indian real estate - why the Cabinet has not cleared the proposal?

Greater stock market play in real estate scrips

Financial experts are assuming that government fears of possible greater capital inflow in case of making change in FDI norms in real estate sector.

The step to delink the FDI provision from investments by FII in real estate (under the portfolio investment scheme) might lead to greater stock market play in real estate scrips.

Government has also rejected the proposal of permitting FII in pre-IPO placements of Indian realty companies.
Government has not made a clarification on the proposal of not detaching the Foreign Direct Investment (FDI) provisions from investments in real estate sector.

The government has also not make clearance over the issue of relaxing the compulsory three-year lock-in period for Foreign Institutional Investors (FII) in real estate sector.

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