New Single largest holding rules for FDI

Companies planning to go in for foreign investments may need to consolidate their shareholding to develop one single largest shareholder. The government will specify a minimum percentage of shareholding, which must be achieved by the domestic largest shareholder. This has been done to put an end to foreign companies gaining complete control of Indian companies due to the often-fragmented domestic shareholding patterns. The Government will start this exercise in sensitive sectors like telecom, financial services, aviation and infrastructure and later extend it. The new rule would apply to these sectors, where the foreign investment is less than 100%.