148 India’s Financial Markets
be as low as 8 acres. But to ensure foreign money is for development and not for
quick speculation, there are some restrictions. Foreign investors cannot resell
undeveloped land, cannot repatriate profits in less than three years and must
complete projects within specific time frames. For foreign direct investment
(FDI) in joint ventures with real estate companies, foreign individuals or insti-
tutions cannot own more than 74% of the joint venture. And the Reserve Bank
of India must give permission for any such investment.
For example, in November 2007, a Merrill Lynch entity paid $370 million
to DLF for a 49% stake in seven residential project special purpose vehicles in
Chennai, Bangalore, Kochi and Indore. DLF claims