Transfer of shares or convertible or warrants of an Indian company by a person resident outside India:
Subject to the provisions of sub-regulation(2), a person resident outside India holding the shares or convertible debentures or warrants of an Indian company in accordance with these regulations, may transfer the shares or convertible debentures or warrants so held by him, in compliance with the conditions specified in the relevant schedule of these regulations.
Further subject to minimum lock-in period of one year or minimum lock-in period as prescribed under Annex-B of schedule 1 whichever is higher, a person resident outside India holding the shares or convertible debentures or warrants of an Indian company containing an optionally clause in accordance with these regulations and exercising the option/right, may exit without any assured return, subject to the following conditions:
- In case of limited company, at the market price prevailing on the floor of the recognized stock exchanges;
- In case of equity shares, preference shares or debentures of the unlisted company, at a price not exceeding that arrived at as per any internationally accepted pricing methodology for valuation of shares on arms' length basis, duly certified by a chartered accountant or SEBI registered merchant banker. The guiding principle would be that the non-resident investor is not guaranteed any assured exit price at the time of making such investment/agreements and shall exit at the price prevailing at the time of exit, subject to lock-in period requirement.
- A person resident outside India, not being a non-resident Indian or an overseas corporate body, may transfer by way fo sale of gift the (shares or convertible debentures or warrants) held by him or it to any person resident outside India;
- A non-resident Indian may transfer by way of sale or gift, the share or convertible debentures or warrants held by him or it to another non-resident Indian or overseas corporate body only.
- A person resident outside India holding the shares or convertible debentures of an Indian company in accordance with these regulations,
- may transfer the same to a person resident in India by way of gift;
- may sell the same on a recognized stock exchange in India through a registered broker.