Shares of IDFC Ltdon Thursday rose by over 7 per cent after the Reserve Bank lifted the restrictions placed on FIIs purchasing shares of the company.
After making a strong opening, shares of the company further surged 7.42 per cent to Rs 99.10 on the BSE.
On the NSE, the scrip gained 7.58 per cent to Rs 99.25.
The Reserve Bank yesterday lifted the restrictions placed on FIIs purchasing shares of IDFC as the foreign shareholding in the company has gone below the prescribed limit.
FIIs are allowed to hold up to 54 per cent in IDFC -- Infrastructure Development Finance Company Ltd.
As of quarter ended June 2013, FIIs had 52.19 per cent holding in IDFC Ltd, according to the BSE data.
"... foreign share holdings in IDFC Ltd by Foreign Institutional Investors (FIIs)/Non-Resident Indians (NRIs)/ Persons of Indian Origin (PIOs)/Foreign Direct Investment (FDI)/American Depository Receipts (ADRs)/Global Depository Receipts (GDRs) under the Portfolio Investment Scheme (PIS) have gone below the prescribed threshold limit stipulated under the extant FDI Policy," RBI said in a notification yesterday.
"Hence, the restrictions placed on the purchase of shares of IDFC Ltd are withdrawn with immediate effect," it added.
IDFC shares surges 7 pct as RBI removes FII restrictions
Shares in IDFC Ltd surge as much as 7 percent after the Reserve Bank of India on Wednesday lifted restrictions placed on foreign investors purchasing shares of the company as their shareholding in IDFC fell below the prescribed limit.
The company had reduced the limit that foreign investors can own in the infrastructure lender to 54 percent from 74 percent without giving a reason in August.
Dealers say the FII investment limit was reduced earlier to comply with RBI's bank licence guidelines as the company has applied for a banking licence
The stock was trading up 4.7 percent at 96.60 rupees at 9:48 am while the broader market was down 0.50 per cent