As a New Year Gift to foreigners who wish to invest in India directly, Indian govt allowed Qualified Foreign investors(QFI) to invest in India. It will boost capital inflow in India.
Definition of Qualfied Foreign Investors:
It can be individuals, groups or associations based abroad who are allowed to invest directly in indian equity market and in mutual funds. For example , any foreigner living in America, Canada ,Russia or singapore can invest in India without hurdles. Only they have to follow certain procedures initially. First they have to fufil the requirement of ‘Know your Customer” (KYC norms) by filling the concerned norm as Govt of India wants to know to whom the investment benefits. This has to be done through any depository participants in india like reliance securities, icicidirect, way2wealth securities etc. Then approval of RBI is to be obtained for trading in indian stocks. Then QFIs can purchase upto 5% of the paid up capital of the company with the overall limit of capped at 10% in a specified company. For information of QFIs, these limits are over and above that for FIIs and NRIs.
QFI can either trade on daily basis or on investment basis. Online stock trading is available and hence they can trade sitting in their houses. For any help or to work as an agent for them, the undersigned will be happy to do it for identifying good brokerage houses and also to follow up for any problems. Ofcourse it will come with very very marginal fee which will be nothing as compared to benefits. Indian market stocks are trading at cheap rates for certain companies which are spread overall world. For example Tata steel which is trading in steel throughout the world is trading at 3 to 4 PE multiples ( this means within three to four years, the earning will be equal to price paid for the share). Happy Investing in India.
C.R. Venkata Ramani