RBI allows CEAT to raise foreign holding limit to 45%

The Reserve Bank of India (RBI) has allowed tyre and tubes maker CEAT to raise foreign investment, allowing overseas investors to buy up to 45 per cent of the paid up capital in the company.

Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 45 per cent of the paid up capital of CEAT under the Portfolio Investment Scheme (PIS), RBI said in a notification.

"...the company has passed resolutions at its Board of Directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs," it added.

The purchases could be made through primary market and through stock exchanges, it added.

As per the data available on the BSE, FIIs held 15.65 per cent shares of the company as of September 30, 2014.

FIIs, RFPIs, NRIs and Persons of Indian Origins can invest in primary and secondary capital markets in India through PIS.

RBI monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis.

CEAT scrip closed 2.6 per cent higher at Rs 920.20 on the BSE on Monday.