The Reserve Bank of India (RBI) has amended the Foreign Exchange Management Act (Fema) withdrawing with immediate effect the facility for acquisition of shares and convertible debentures of Indian companies engaged in the print media by foreign venture capital investors, foreign institutional investors (FIIs), non-resident Indians (NRIs) and overseas corporate bodies (OCBs). The new restriction will also apply to investment by NRIs/OCBs on non-repatriation basis.
This move comes in the wake of the Rs 50 crore IPO of Mid-Day Multimedia Ltd., falling foul of the 1955 Cabinet decision banning foreign investment in the print media. The information and broadcasting ministry had earlier written to both the RBI and the finance ministry asking for clarification on the decision to clear investment by FIIs in print media.
Most of the FIIs termed the RBI decision as insignificant since there were hardly any significant print media stocks in the market. The FIIs were sceptical about the announcement and said the issue about investment by FIIs in the print media was never clear.