The Securities and Exchange Board of India (‘SEBI’) and RBI had, by way of their circulars dated June 15, 2018, inter alia, introduced a ‘per corporate’ limit, disallowing a foreign portfolio investor (‘FPI’) from having an exposure of more than 20% of its entire corporate bond portfolio to a single corporate (including exposures to related entities of such corporate). In order to encourage a wider spectrum of investors to access the Indian corporate debt market, on February 15, 2019, RBI issued a notification withdrawing the above mentioned ‘per corporate’ limit with immediate effect. The ‘per issue’ limit for FPIs (i.e., an FPI and its investor group may invest in any issue of corporate bonds subject to a cap of 50% of such issue) and the 20% short-term investments limit for FPIs continues to remain in place. This withdrawal is in line with the announcement made in paragraph 10 of the Statement on Developmental and Regulatory Policies of the Sixth Bi-monthly Monetary Policy Statement for 2018-19 of RBI, dated February 7, 2019.

To give effect to RBI’s circular dated February 15, 2019, SEBI similarly withdrew this requirement by its circular dated March 12, 2019, with immediate effect.