MNC shares rally as RBI allows foreign promoters to raise stake

HUL, GSK Healthcare, SKF India, Alstom, Sesa Goa, Ambuja Cements and Heidelberg Cement have rallied 6-12% on BSE.

Shares of multinational companies (MNC) are in limelight on the bourses after the Reserve Bank of India (RBI) has changed the rules to make it easier for foreign and non- resident Indian (NRI) promoters to raise stake in listed Indian companies.

Hindustan Unilever, GSK Healthcare, SKF India, Alstom, Sesa Goa, Ambuja Cements and Heidelberg Cement have rallied 6-12% on the Bombay Stock Exchange.

Offshore parents of such local companies can now freely purchase shares by using the services of registered Indian brokers. Such acquisition of shares can also be funded with dividend amounts paid by Indian companies to these non-resident promoters. The new rule will apply to all non-resident entities, including NRIs.

At present, foreign institutional investors (FIIs), qualified foreign investors (QFIs) and NRIs are eligible to buy shares on Indian stock exchanges in compliance with foreign exchange regulations.

The move can bolster the stocks of companies where foreign promoters have a stake.