Section 6(2) in The Foreign Exchange Management (Transfer Or Issue Of Security By A Person Resident Outside India) Regulations, 2000
(2)An Indian company which satisfies the following conditions, may offer to a person resident outside India, equity or preference shares or convertible debentures on right basis, namely:(i)the offer on right basis does not result in increase in the percentage of foreign equity already approved, or permissible under the Foreign Direct Investment Scheme in terms of these regulations;(ii)[ the existing non-resident shareholders may apply for issue of additional shares, and the investee company may allot the same subject to the condition that the overall issue of shares to non-residents in the total paid-up capital does not exceed the sectoral cap;] [Added by G.S.R. 223(E), dated 12.11.2002 (w.e.f. 18.3.2003).](iii)[] [Renumbered by G.S.R. 223(E), dated 12.11.2002 (w.e.f. 18.3.2003).] the existing shares or debentures against which shares or debentures are issued by the company on right basis were acquired and are held by the person resident outside India in accordance with these regulations;(iv)[ The offer on right basis to the persons resident outside India shall be: [Substituted by Notification No. G.S.R. 341 (E) dated 7.4.2010 (w.e.f. 8.5.2000).](a)in the case of shares of a company listed on a recognized stock exchange in India, at a price as determined by the company;(b)in the case of shares of a company not listed on a recognized stock exchange in India, at a price which is not less than the price at which the offer on right basis is made to resident shareholders.]
