Kingfisher imposes an FII cap of 3 percent

Kingfisher imposes an FII cap of 3 percentIndia's troubled private sector airline, Kingfisher has imposed a limit of 3 per cent on the Foreign Institutional Investment (FII) in order to allow for foreign investment into the company.

The company, which is led by Vijay Mallya, said that it has imposed FII cap with a "view to keeping the company's capital structure in readiness for transactions that may be identified in the future for benefit of all stakeholders."

Overseas institutional investors currently hold 2.46 percent of Kingfisher, according to data available at the stock exchange. The move might allow foreign investors to have a stake of upto 46 percent in the troubled airline, which is now grounded. The country allows a foreign investment of up to 49 percent in domestic aviation companies.

A resolution to approve the decision was passed by the board of the company on 12, December 2012. The board members have been discussing various alternatives to improve the financial position of the company by facilitating investments. The company has been holding proposed investment with several companies including Abu Dhabi's Etihad Airways.

The shares of the company, which have been siring since previous seven days, again rose 5 per cent to touch an upper circuit limit of Rs 17.27 on the Bombay Stock Exchange (BSE).