Relaxation in FCCB Buyback Norms
Foreign Currency Convertible Bond Generally companies offers to Buyback FCCB from their bond holders at discount. In respect to the buyback of FCCB, Reserve Bank of India has issued various circulars stipulating the guidelines for the buyback. Buyback of the FCCB is allowed by the Indian companies under automatic as well as approval route. As per the norms prior to the issue of A. P. (DIR Series) Circular No.1 dated 5th July, 2012 , the Indian companies were allowed to buyback FCCB under the automatic route subject to the minimum discount of 8 per cent on the book value. And under the approval route, the Indian companies were permitted to buyback FCCBs up to USD 100 million of the redemption value per company, out of their internal accruals with the prior approval of the Reserve Bank, subject to a : Minimum discount of 10 per cent of book value for redemption value up to USD 50 million; Minimum discount of 15 per cent of book value for the redemption value over USD 50 m...