Issuance of Bonus Shares to Non-Resident Shareholders in Prohibited Sectors · Press Note No. 2 (2025 Series)
DPIIT press note Press Note No. 2 (2025 Series) · 07 Apr 2025
Official title
Press Note No. 2 (2025 Series) : Clarifications on the permissibility of issuance of bonus shares to
Official record
Open source pageSummary
Check the official recordWhat changed
Indian companies in sectors prohibited for foreign direct investment may issue bonus shares to existing non-resident shareholders. The shareholding pattern of the non-resident shareholder must not change after the issuance of the bonus shares. The company must comply with all applicable laws and regulations. This clarification applies to the Consolidated FDI Policy. The change becomes effective on the date the government issues the applicable Foreign Exchange Management Act notifications.
What you must do
- Ensure the shareholding pattern of the non-resident shareholder remains unchanged after the bonus share issuance.
- Comply with all applicable rules, laws, regulations, and guidelines.
Key dates
- Effective date
Document text
Government of India
Ministry of Commerce and Industry
Department for Promotion of Industry and Internal Trade
FDI (Policy, Facilitation & Data) Section
FDI Policy Cell
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Press Note No. 2 (2025 Series)
Subject: Clarifications on the permissibility of issuance of bonus shares to existing non-resident shareholder(s) by Indian companies engaged in sectors prohibited for FDI.
As per the Consolidated FDI Policy Circular of 2020 dated 15.10.2020, as amended from time to time (FDI Policy), Indian companies are permitted to issue bonus shares to existing non-resident shareholders, subject to adherence to sectoral cap, if any. Accordingly, the following clarification is inserted under Para 1 Annexure 3 of the FDI Policy:
"An Indian Company engaged in a sector/activity prohibited for FDI, is permitted to issue bonus shares to its pre-existing non-resident shareholder(s) provided that the shareholding pattern of the pre-existing non-resident shareholder(s) does not change pursuant to the issuance of bonus shares"
2. Issuance of bonus shares must comply with the applicable rules/laws/regulations/guidelines.
3. The above clarification will be effective from the date of issue of the applicable FEMA notifications.
[unclear in source: signature] 7/4/25
(Sandhya Bhullar)
Joint Secretary to the Government of India
DPIIT File No.: P-15022/1/2025-FDI Policy dated 07.04.2025
Copy forwarded to:
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Press Information Officer, Press Information Bureau - for giving wide publicity to the above Press Note.
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Joint Secretary, Department of Economic Affairs, North Block, New Delhi - For suitably incorporating the policy changes in Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 and the relevant schedules thereof.
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Reserve Bank of India, Foreign Exchange Department, Mumbai - For suitably incorporating the policy changes in Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 and the relevant schedules thereof.
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NIC Section in the Department for Promotion of Industry and Internal Trade- for uploading the Press Note on DPIIT's website
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Hindi Section, DPIIT- for providing the Hindi version.
Source details
- Source
- dpiit
- Type
- press note
- Published by source
- 07 Apr 2025
- Document number
- Press Note No. 2 (2025 Series)
- Issuing division
- Department for Promotion of Industry and Internal Trade
- Coverage area
- Not available