Section 9(1) in The Foreign Exchange Management (Transfer Or Issue Of Security By A Person Resident Outside India) Regulations, 2000
(1)Subject to the provisions of sub-regulation (2), a person resident outside India holding the [shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] [Substituted by Notification No. G.S.R. 858 (E), dated 16.11.2015 (w.e.f. 8.11.2005)] of an Indian company in accordance with these regulations, may transfer the [shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] [Substituted by Notification No. G.S.R. 858 (E), dated 16.11.2015 (w.e.f. 8.11.2005)] so held by him, in compliance with the conditions, specified in the relevant Schedule of these regulations.[Further, subject to minimum lock-in period of one year or minimum lock-in period as prescribed under Annex-B of Schedule 1 whichever is higher, a person resident outside India holding the [shares or convertible debentures or warrants] [Added by Notification No. G.S.R. 805 (E) dated 12.11.2013 (w.e.f. 8.5.2000)] of an Indian company containing an optionality clause in accordance with these Regulations and exercising the option/right, may exit without any assured return, subject to the following conditions:(i)In case of listed company, at the market price determined on the floor of the recognized stock exchanges;(ii)In case of equity shares of unlisted company, at a price not exceeding that arrived on the basis of Return on Equity (RoE) as per latest audited balance sheet. Any agreement permitting return linked to equity as above shall not be treated as violation of FDI policy.Explanation - RoE shall mean Profit After Tax/ Net Worth; Net worth would include all free reserves and paid up capital.(iii)In case of Preference [shares or convertible debentures or warrants] [Substituted for the words "shares or convertible debentures" Notification No. G.S.R. 436 (E), dated 30.6.2014 (w.e.f. 8.11.2005)], at a price worked out as per any internationally accepted pricing methodology at the time of exit, duly certified by a Chartered Accountant or a SEBI registered Merchant Banker. The guiding principle would be that the non-resident investor is not guaranteed any assured exit price at the time of making such investment/agreements and shall exit at the price prevailing at the time of exit, subject to lock in period requirement.]
