Borrowers must meet stringent financial criteria, including a minimum net worth of ₹500 crore, three consecutive years of net profit and – if the acquirer is not listed – an investment-grade credit rating before disbursement.The regulator has also relaxed the portfolio limit for such loans, raising the banking limit on acquisition financing to 20% of eligible capital, compared to a proposed 10% of Tier 1 capital in the draft rules.
The limit will apply within the overall capital market exposure ceiling, the report said.
The final guidelines will be relaxed after consultation with the banks and will apply from April 1, 2026.
The RBI has aligned the rules for infrastructure trusts, saying that InvIT-related acquisition financing must comply with the new acquisition financing framework and link this to conditions around control, leverage and security requirements. As for retail borrowers, the RBI has increased the amount that individuals can borrow against shares by raising the limit to ₹1 crore per person from ₹20 lakh earlier. Under this higher ceiling, banks can lend up to ₹25 lakh to individuals specifically for purchasing securities in the secondary market.
Banks can now extend up to ₹25 lakh per individual for subscriptions to initial public offers (IPO), follow-on public offers (FPO) and employee stock option plans (ESOPs), provided borrowers contribute a minimum cash margin of 25%, which means loans should not exceed 75% of the subscription value.
For other market instruments, the RBI has set specific ceilings: Borrowings against listed debt instruments rated BBB or above, mutual funds, exchange-traded funds and units of REITs or InvITs will follow the LTV ceilings applicable under the new framework, ranging from 60% for listed equities to 85% for highly rated debt instruments and 75% for equity-oriented funds, ETFs and trust units.
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