ODI Valuation

Overseas Direct Investment (ODI) means when a company or individual invests in a foreign business by either buying a significant part of that foreign business, becoming a part of its founding documents, or acquiring a substantial share of a foreign business that's listed on a stock exchange. If the investment is in a company that's not listed on a stock exchange, it's still considered ODI.

Issue of shares for Unlisted Companies

Compliance with Foreign Exchange Management (Overseas Investment) Rules, 2022:

Governed by Rule 16 of Foreign Exchange Management (Overseas Investment) Rules, 2022.
Valuation Certificate requirement: AD bank, before facilitating a transaction, shall ensure compliance with arm’s length pricing taking into consideration the valuation as per any internationally accepted pricing methodology for valuation. A valuation report is required usually from a Merchant Banker.

Issue of shares for Listed Companies

Compliance with Foreign Exchange Management (Overseas Investment) Rules, 2022:

Governed by Rule 16 of Foreign Exchange Management (Overseas Investment) Rules, 2022.
Valuation Certificate requirement: AD bank, before facilitating a transaction, shall ensure compliance with arm’s length pricing taking into consideration the valuation as per any internationally accepted pricing methodology for valuation. A valuation report is required usually from a Merchant Banker.