In order to provide additional source of funding, the RBI on Tuesday allowed Indian corporates to raise funds from overseas market in rupee denominated bonds having some limited end use restrictions with a minimum maturity of five years.
“Any corporate or body corporate is eligible to issue Rupee denominated bonds overseas. Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) coming under the regulatory jurisdiction of the Securities and Exchange Board of India are also eligible” RBI said in its guidelines.
As per the norms, companies would be allowed to raise up to $750 million per annum under the automatic route. Beyond this limit will require prior approval of the RBI.
However, there is small negative list regarding use of proceeds, which include stock market operations, real estate activity and purchase of land.
