FII INVESTMENT IN INDIA

This Press release is issued in response to the news item which appeared in a financial newspaper on 30^th October, 2003.  The news item refers to contribution of investment by NRIs through the FII route in India.  According to the data available with SEBI, out of the total net investment of Rs.72,965 crores in equities as on September 30, 2003, 84% is held by Mutual Funds, Asset Management Companies, Investment Companies, Banks, Pension Funds, etc.  The broad constituents of FII investments are:

508 entities are registered as FIIs with SEBI as on 30^th September, 2003.  It is to be noted that all the FIIs who are investing in Indian Market are registered and regulated by the respective overseas regulators in their home countries.  The private companies are generally broad based, but not listed on any exchange. Further, the investments of private companies are routed through FIIs which are regulated entities duly registered here.

Out of these entities, only 12 registered FIIs have issued Participatory Notes (PN) outstanding as on 30^th September, 2003.  The total value of underlying investment in equity represented by the PNs is Rs.19,125 crores. Analysis of PN Reports submitted by the 12 FIIs as on 30^th September, 2003 indicates that the underlying investments in equities represented by PNs are diversified across over 200 scrips.  The FIIs issuing PNs have also furnished confirmations to SEBI that they / their associates / clients have not issued the PNs directly or indirectly to OCBs.  It may be seen that the above data does not warrant or support any inference that NRIs have contributed a substantial percentage of the outstanding FII investment.  The news item in question referring to the NRI contribution forming nearly 40% of the FII investment is therefore conjectural in nature.