Can an Indian Company make direct investment in an overseas concern by way of share swap?
A. Yes, requests for direct investment outside India in a JV/WOS by way of share swap arrangement can be made under the automatic route provided the valuation norms prescribed i.e. valuation of the shares is done by a category I Merchant Banker registered with the Securities and Exchange Board of India (SEBI) or an Investment Banker/Merchant Banker outside India registered with the appropriate Regulatory Authority in the host country, are satisfied. Investors may also please note that all share swap transactions require prior approval of the Foreign Investment Promotion Board for the inward leg of the investment.
