Monday, 21 April 2014

FOREIGN DIRECT INVESTMENT (FDI) IN LIMITED LIABILITY PARTNERSHIP (LLP)

ISSUING AUTHORITY : RESERVE BANK OF INDIA
DATE OF ISSUE : 16/04/2014
EFFECTIVE DATE : IMMEDIATE EFFECT
CIRCULAR NO. 123


LLP's can accept direct investment from foreign investors, subject to certain riders. Following persons shall not eligible to invest in LLPs:
  1. a citizen/entity of Pakistan and Bangladesh or
  2. a SEBI registered Foreign Institutional Investor (FII) or
  3. a SEBI registered Foreign Venture Capital Investor (FVCI) or
  4. a SEBI registered Qualified Foreign Investor (QFI) or
  5. a Foreign Portfolio Investor registered in accordance with Securities and Exchange Board of India(Foreign Portfolio Investors) Regulations, 2014 (RFPI).
ELIGIBILITY OF LLP FOR ACCEPTING FOREIGN INVESTMENT

LLPs in all sectors where 100% FDI is permitted would be eligible to get FDI. However such investments would need prior government approval. 

PRICING

Any transfer of capital contribution / profit share from a resident to a non-resident would be for a consideration equal to or more than the fair price of the capital contribution or the profit share of the partnership.

Further, any transfer of capital contribution/profit share from a non-resident to a resident would be for a consideration which is less than or equal to the fair price of the capital contribution / profit share of the partnership.
REPORTING REQUIREMENTS
The LLP which have received foreign investment in terms of FIPB approval shall comply with the reporting requirement in respect of FDI within 30 or 60 days, as applicable from the date of receipt of the amount of consideration.
DOWNSTREAM INVESTMENTS
Further, an Indian Company with foreign investment can make a downstream investment in a LLP only if both the company and the partnership operate in the sectors where 100% FDI is allowed under the automatic route.
For detailed Circular, please find the link below:
A.P. (DIR Series) Circular No. 123

Friday, 18 April 2014

NEWS WRAP - APRIL 18, 2014

  • Aviva shortlists Birla Sun Life, HDFC Life & Max Life to sell stake in Joint Venture; valuation likely at over Rs. 5,000 crore.
  • Fabindia to introduce western wear brand 'Fable' next week in a country.
  • RBI sells government bonds worth Rs. 20,000 crore in the country's largest Auction.
Source: Economic Times

Thursday, 17 April 2014

NEWS WRAP - APRIL 17, 2014

  • Ajay Piramal set to pick up 20% stake in Shriram Capital.
  • Nokia's manufacturing plant in Chennai, India will probably be taken out of the deal with Microsoft.
  • Supreme Court willing to defreeze Saharas bank accounts to help Subrata Roy repay Rs. 10,000 crore.
  • Infosys goes WIPRO way, to merge data analytics operations under one roof.
Source: Economic Times

Monday, 14 April 2014

NEWS WRAP - APRIL 14, 2014

  • Flipkart and Myntra enter final lap in negotiation.
  • Bharti in talks with French Retailer, Carrefour for wholesale Joint Venture, may have 74% stake in Venture.
  • Future group to acquire Nilgiris for upto Rs. 175 crore.
Source: Economic Times

Friday, 11 April 2014

NEWS WRAP - APRIL 11, 2014

  • Vodafone acquires Piramal and Analjit Singh's stakes for Rs. 1,241 crores to complete its Indian arm buyout.
  • Dynavest India, a promoter of Max India buys 26 lakhs shares for over Rs. 51 crore.
  • Life Insurance Corporation of India (LIC) buys debt worth Rs. 4,300 crore from State Bond Auctions conducted by RBI of seven states.
  • Bombay High Court asks Geodesic to deposit $162 million in London Bank for its failure to redeem Foreign Currency Convertible Bonds (FCCBs).
  • Online Fashion Brand Yepme goes global, targets NRI market.
Source: Economic Times

Thursday, 10 April 2014

NEWS WRAP - APRIL 10, 2014

  • CCI has approved Rs. 2000 crore Torrent-Elder Pharma acquisition deal in India and Nepal.
  • Narayani heights, a Ahmedabad-based hospitality Company inaugurated its new project Narayani Heights Hotels & Resorts.
  • Infrastructure Firm NCC proposes to raise Rs. 650 crore through Right Issue of equity shares.
  • Sun Pharma-Ranbaxy deal needs CCI clearance to ensure it doesn't lead to a Monopoly.
Source: Economic Times

SUN PHARMA'S RANBAXY ACQUISITION: THE WINNERS AND LOSERS

India's Sun Pharma acquired Gurgaon-based drug maker Ranbaxy Laboratories, owned by Japan's Diiachi Sankyo, for $4 billion in a deal to create world's fifth largest specialty generic Pharma Company through an all-stock merger in which five shares of Ranbaxy will fetch four shares of Sun Pharma. 

Sun-Ranbaxy combined will become largest Indian Pharma Company. The Sun Pharma- Ranbaxy deal is the biggest in Pharma sector in Asia-Pacific.

WHO BENEFITS AND HOW?

Daiichi is the parent company of Ranbaxy since it bought the Indian drug maker from its earlier promoters. With Sun Pharma acquiring Ranbaxy, Daiichi is relieved of the burden of managing Ranbaxy’s problems. It will hold 9% stake in the combined entity.


ENHANCED GLOBAL MARKET PRESENCE


The combined entity will have 47 manufacturing facilities across 5 continents. It will have an established presence in key high growth emerging markets. In India, it will be ranked No. 1 by prescriptions amongst 13 specialty segments.

FINANCIALLY COMPELLING TRANSACTION

Sun Pharma expects to realize revenue and operating synergies of US$ 250 million by third year of acquisition and implement remedial measures to tackle the regulatory issues with the US Food and Drug Administration.

TRANSACTION DETAILS

Under the agreements, Ranbaxy shareholders will receive 0.8 shares of Sun Pharma for each share of Ranbaxy. The expected revenue of the combined entity is $4.2 billion.

Thursday, 3 April 2014

NEWS WRAP - APRIL 3, 2014

  • Greenko in talks with KKR to raise $100 million.
  • Larsen & Toubro may write-off slow moving orders worth Rs. 15,000 crore including 9,000 crore in construction.
  • Supreme Court directs Samsung global head to appear in court in fraud case worth $1.4 million.
  • SpiceJet shares rise over 19% even as the aviation regulator halts Re 1 ticket offer.
  • IPL title sponsor, PepsiCo demands Indian Cricket Board for higher visibility of its brand in cricket stadiums.
  • Bharti Airtel plans to raise $2 billion via bond issues.
Source: Economic Times

Wednesday, 2 April 2014

NEWS WRAP - APRIL 2, 2014

  • Rasna to spend Rs. 1.25 crore over rebranding with new logo and commercials.
  • Credit Policy: RBI bans FIIs from investing in Treasury Bills.
  • Posco moves Competition Commission of India (CCI) seeking captive mine exploration licence in Odisha.
  • Government amends CCI rules related to combinations.
  • India Hospitality Corp (IHC) and Barista Lavazza takeover discussions end without agreement.
Source: Economic Times