Mauritius-based investment firm ICP Investments' bid to acquire 40% stake in Umang Realtech from 2i Capital has fallen through. Umang Realtech is a group company of Delhi-based real estate developer Uppals. The Foreign Investment Promotion Board (FIPB), the nodal body for clearing foreign investment into India, has rejected ICP's proposal to buy shares worth $5 million from 2i Capital Asset Management.

2i Capital and Uppals had set up Umang Realtech, a 40:60 joint venture, last year. The two partners, however, terminated the JV in March. FIPB rejected ICP's proposal on the ground that it involved repatriation of foreign direct investment (FDI) before the lock-in period.

Indian FDI rules does not allow repatriation of investments before three years. 2i Capital is a Mauritius-based firm and thus not allowed to exit before the lock-in period expires.Vivek Shekhar, Managing Director 2i capital said, "We will continue to hang in. There are other investors who have put $40-$50 M.  Its not a big thing".

2i Capital was looking to transfer its 1.97 crore shares of Umang Realtech, to ICP. According to the FDI policy in the real estate sector, original investments cannot be repatriated before a period of three years, from the completion of minimum capitalisation norms. However, the investor could potentially exit with the prior approval of FIPB. The FIPB however took the view that similar proposals had been turned down in the past as they amounted to repatriation of FDI before lock-in period and rejected the proposal.

Besides picking up the equity stake held by 2i, ICP Investments was also looking to take over the investment commitment of 2i Capital-- Rs 260-282 crore, over a period of three years.

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