Centre proposes stricter valuation rules for overseas direct investments

New rules will be effective from Monday

The government on Monday introduced new set of rules for domestic entities, including companies and large family offices and start-ups, opting for overseas direct investment route (ODI), which could impact their acquisition decisions in a big way.

The new rules, effective from Monday, made explicit distinction between ODI (all investments in unlisted foreign entities and more than 10 per cent in listed foreign entities) and OPI (investment by listed companies in foreign listed securities). The rules state that all transactions of ODI must happen at fair value.

Besides, round tripping structures now do not require approval from Reserve Bank of