What Is the FPI 10 Percent Limit in a Listed Company?

The FPI 10 percent limit is the ceiling on how much of one listed Indian company a single foreign portfolio investor may own. SEBI's Master Circular for Foreign Portfolio Investors (SEBI/HO/AFD/AFD-PoD-2/P/CIR/2024/70 dated 30 May 2024, first read on 18 September 2026 and re-read unchanged on 8 October 2026) restates the rule from Regulation 20(7) of the SEBI (Foreign Portfolio Investors) Regulations, 2019: "the purchase of equity shares of each company by a single foreign portfolio investor or an investor group shall be below ten percent of total paid-up equity capital on a fully diluted basis of the company." The words that do the work are investor group and fully diluted. Related FPIs are counted together, the base is the fully diluted capital rather than the shares outstanding today, and the depositories run the check every day. The 30 May 2024 document is still the FPI master circular in force on 8 October 2026: SEBI's master circulars list shows no later one, and its 25 most recent circulars (7 July to 7 October 2026) change no part of the 10 percent rule. One part of the surrounding machinery did narrow in September 2026: by circular dated 7 September 2026, read on 22 September 2026, SEBI removed the investor group reporting requirement for FPIs investing only in government securities. Here is how the FPI 10 percent limit works, who gets clubbed into an investor group, and what happens when a holding reaches the line.

What is the FPI 10 percent limit, and how is it counted?

The master circular reproduces the regulation in Part C, paragraph 6(i), in the context of primary market issues, and adds the mechanics: at the time of finalising the basis of allotment, registrars "shall use PAN issued by Income Tax Department of India for checking compliance for a single FPI" and must obtain validation from the depositories for the FPI investor group (paragraph 6(ii)).

In the secondary market the test is continuous. Part C, paragraph 1 says that where multiple FPIs belong to the same investor group under Regulation 22(3), "the investment limits of all such FPIs taken together shall be clubbed at the investment limit as applicable to a single FPI." For an individual registered as an FPI, "the individual and his/her relatives who is/are also registered as FPI(s) should also be considered for the purposes of investor group", with relative taking its meaning from section 2(77) of the Companies Act, 2013. Where group members use different custodians, each custodian reports to both depositories, and "the depositories shall club the investments of such FPIs and ensure that combined holdings of all these FPIs remains below 10% of the total paid up equity capital in a listed or to be listed company on a fully diluted basis at any time." The check runs "daily on an end of day basis" (paragraph 1(iii)), and a breach is reported to SEBI within two working days (paragraph 1(vi)).

Who is exempt from clubbing?

The circular lists the exceptions itself (paragraph 1, items viii to x):

• The World Bank Group entities IBRD, IDA, MIGA and IFC are exempt from clubbing under a Government of India letter of 6 January 2016.
• Investments by a foreign government or its related entities from different provinces or states of a country with a federal structure are not clubbed if they have different beneficial owners identified under the PMLA Rules.
• A foreign government agency's investment is clubbed with the foreign government's if they form an investor group, unless a treaty, agreement or Central Government order exempts it.

FPIs in a group may ask the depositories for their group's aggregate percentage in a scrip before investing (paragraph 1(vii)), which tells you the depositories hold a live, scrip-level view of every group's position.

One more exemption arrived on 7 September 2026, and it is a reporting exemption rather than a clubbing one. SEBI's circular of that date, numbered HO/(485)2026-AFD-POD2/I/20296/2026 and read on 22 September 2026, modified Part A, paragraph 1 of the master circular to read: "FPIs investing only in Government Securities shall not be required to furnish investor group details." The earlier wording, inserted on 10 September 2025, had limited that relief to government securities bought under the Fully Accessible Route. SEBI's stated reason is that the Reserve Bank of India, by circular dated 5 June 2026, withdrew the concentration limit for FPIs investing in government securities through the General Route, so identifying the investor group for a government-securities-only FPI no longer serves a purpose. Equity investors are untouched: the clubbing rule and the 10 percent test still apply in full to any FPI that buys listed equity.

What happens when an FPI reaches the 10 percent limit?

Part C, paragraph 17 is headed "Clarification regarding adherence to below 10% investment limit" and answers this directly. If an FPI and its investor group "reach 10% or more of the total paid up equity capital of a company on a fully diluted basis, they must follow extant FEMA rules in this regard." The FPI then has a choice under Regulation 22(3): treat the entire investment in that company as foreign direct investment. If it does:

The 10 percent line is therefore the boundary between portfolio investment and direct investment for a single holder, quite apart from the company-level ceilings.

How is this different from the aggregate FPI limit?

Two different questions, two different rules:

• One holder in one company: the FPI 10 percent limit, monitored by the depositories at group level from demat holdings.
• All foreign holders in one company: the aggregate FPI limit, the NRI limit and the sectoral cap, monitored by the company's designated depository and published through the FPI red flag list when headroom falls to 3 percent or less.

A company can have plenty of aggregate headroom while a single fund approaches 10 percent, and the reverse.

Where does the FPI 10 percent limit show up in the filings?

The quarterly shareholding pattern is where a reader sees a large FPI stake. Every public shareholder above 1 percent is named in the filing, so an FPI at 8 or 9 percent is visible by name and by percentage; see how to check FPI holdings in a stock for the tables. The daily flow figure does not carry names, only totals: see FII/DII activity explained. For who qualifies as an FPI in the first place, see what an FPI is.

Two reading notes. First, the shareholding pattern's headline percentages are computed on the shares outstanding, while the format has carried a separate fully diluted share count, including warrants, ESOPs and convertibles, since the quarter ended 30 June 2025 (see how to read a shareholding pattern). The 10 percent test uses that fully diluted base, so a fund's headline percentage can sit slightly above the figure the depositories test. Second, the filing shows each registered FPI separately; the clubbing across an investor group is done by the depositories and is not visible in the pattern itself.

Flock's FII and DII page describes its per-stock view: the foreign and domestic institutional percentages as filed in each company's NSE and BSE shareholding pattern, dated to the quarter and linked to the exchange filing. Those are category totals; the named holders above 1 percent sit in the filing itself, so a stake near the FPI 10 percent limit is read from the exchange record rather than inferred. What it means for the company or for you is your call to make.