SEBI/HO/AFD/AFD -POD -3/P/CIR/2024/152

CIRCULAR SEBI/HO/AFD/AFD -POD -3/P/CIR/2024/152 To, Foreign Portfolio Investors (“FPIs”) Designated Depository Participants (“DDPs”) and Custodians The Depositories The Stock Exchanges and Clearing Corporations Dear Sir / Madam, Subject: Procedure for reclassification of FPI investment to FDI Regulations 20(7) and 22(3) of the SEBI (Foreign Portfolio Investors) Regulations, 2019 provide that in case a foreign portfolio investor fails to divest its holdings (in excess of the prescribed threshold), within five trading days, the entire investment in the company by such foreign portfolio investor including its investor group shall be considered as investment under the Foreign Direct Investment ("FDI"), as per the procedure specified by the Board. The procedure specified under Para 17 of Part C of Master Circular for Foreign Portfolio Investors, Designated Depository Participants and Eligible Foreign Investors" No. SEBI/HO/AFD/AFD -PoD -2/P/CIR/P/2024/70 dated May 30, 2024 stands modified as under: " 17. Procedure for reclassification of FPI investment to FDI In case the investment made by a Foreign Portfolio Investor (along with its investor group) reaches 10% or more of the total paid up equity capital of a company on a fully diluted basis and the FPI (along with its investor group) intends to reclassify its FPI holdings as Foreign Direct Investment (FDI) , it shall follow extant FEMA Rules and circulars issued thereunder in this regard. Pursuant to receipt of such intent from the FPI, the respective Custodian shall report the same to the Board and freeze purchase transactions by such FPI in equity instruments of such Indian company, till completion of the reclassification . November 11, 2024 On receipt of request from the FPI for transfer of the equity instruments of such

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