According to Reliance Money's report, the research firm believes that the RBI’s FCCB buyback policy is a welcome move but grossly inadequate.
Reliance Money's report:
Consequent to the recent RBI directive, FCCBs are now being allowed to be bought back by Indian Companies. It has now been decided to permit premature buyback of FCCBs. For the buyback of FCCBs out of rupee resources the RBI has fixed a minimum discount of 25% on the book value. The amount of the buyback is limited to USD 50 million of the redemption value per company wherein this window will be kept open till March 09. We believe RBI’s FCCB buyback policy is a welcome move but grossly inadequate.
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