By Jayshree P Upadhyay and Nishit Navin
MUMBAI (Reuters) -India’s markets regulator on Wednesday reduced the regulatory requirements for foreign investors who invest exclusively in the country’s government bonds.
The Securities and Exchange Board of India’s board, which met in Mumbai, also made it easier for state-owned companies to delist their shares from stock exchanges.
Foreign investors buying only government bonds need not disclose their investor group details as these securities carry low risk, SEBI said.
Foreign buying of Indian shares and bonds are subject to limits and investors have to disclose their investor group details to enable monitoring of the limits.
Foreign investors have flocked to Indian government bonds after their inclusion in global indices such as JPMorgan Global Emerging Market Bond Index and FTSE Russell Emerging Markets Government Bond Index.
As of March 2025, they held more than 3 trillion Indian rupees ($34.71 billion) in the bonds under the fully accessible route, which allows them to invest without restrictions such as security-specific limits.
Holdings have nearly doubled since March 2024 when they were at 1.74 trillion rupees, data from the regulator showed.
The markets regulator also decided to allowed resident and non-resident Indians and so-called overseas citizens to contribute to the corpus of foreign investors who exclusively buy Indian government bonds.
At the board meeting, the regulator also allowed founders of startups to retain stock options after the company goes public.
However, SEBI said all stock options granted at least a year before filing draft papers for public listing will be allowed to be held, but no fresh ones should be granted to such shareholders after listing.
Currently, after startups list, founders are designated as shareholders who can influence the company decisions, and cannot hold stock options.
DELISITING OF CERTAIN STATE-OWNED COMPANIES
The regulator also approved some state-owned companies to delist from stock exchanges without approval from minority shareholders.
Shares of many state-owned firms trade at relatively high market prices due to their limited free float, making it financially challenging for the government to buy out minority shareholders and delist the firms, SEBI had said last month.
The regulator has now allowed state-owned companies, which have a government shareholding of at least 90%, to delist at a fixed price, which has to be 15% more than the so-called floor price.
“In only 5 public-sector undertakings the promoter holding is equal to or more than 90%,” said Tuhin Kanta Pandey, SEBI Chiarman said.
The separate delisting provisions are not applicable for insurance companies, non-banking financial companies and banks, the regulator said.
($1 = 86.4420 Indian rupees)
(Reporting by Jayshree P Upadhyay and Nishit Navin; Editing by Arun Koyyur)
