Multinationals listed on the NYSE, Nasdaq or London Stock Exchange are now within your reach: Unilever, Honda, Nestle, Novartis, Pfizer, P&G, Whirlpool, Glaxo, ABB, Cadbury Schweppes, Colgate-Palmolive, Bayer -- the list goes on.
Finance Minister Jaswant Singh has finally opened the doors for investments by corporates and individuals in foreign companies, a few minor riders notwithstanding.
These riders could possibly be a way of making sure that there is some amount of reciprocity towards investments, although analysts are unsure of the rationale behind the stipulation.
While the industry was expecting some sort of announcement on these lines permitting mutual funds to invest abroad, what has caught them by surprise is the permission to corporates and individuals as well to invest on similar lines.
Hari Mundra, vice-chairman of Wockhardt, said: "By allowing investments only in companies which in turn have a 10 per cent stake in Indian companies, the government wants to ensure that investments are only made in companies serious about India. This reciprocity concept, while not wholly warranted, is all the same a good way to start."
Corporates can now invest with the stipulation of not being able to invest more than 25 per cent of their net worth while the limits on individuals are yet to be decided.
Munesh Khanna, managing director of investment bank NM Rothschild, said: "I do not see corporates going right away and investing abroad unless there is some strategic reason attached, since investment in equity requires some level of maturity and understanding of markets. However, this is a very progressive step, although industry was not expecting it."
Jamshed Jussawala, general manager, Mastek, added: "The measures are certainly welcome steps and in the right direction. The finance minister had a cushion of comfortable foreign reserves to announce these changes. I, however, do not see corporates rushing in to invest overseas immediately unless they have some additional incentive."
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