Question ID : 40880

Fema Provisions / RBI Master Circular on ODI Investment

Friends, one of my clients wants to invest in a new setup outside India. Since proposed financial commitment is greater than the net worth limit, the company plans to use the net worth of its parent unlisted public company and accordingly submit the application. 1. Can anyone share the draft of consent by parent co. in favour of applicant company strictly in line with law ? 2. Also can anyone please share how the net worth of applicant co. will increase ? 3. Also the parent company has recently acquired majority shares (in sep2020), can applicant co. claim networth of parent co. based on calculation of last available audited balance sheet which is march 2020 which is prior to acquiring the majority interest ? 4. Is there any time limit of holding in applicant co. to avoid any doubts of planned transaction just to secure ODI compliance ? Many thanks for your time. Awaiting kind response from the experts. Siddharth