India's new restrictions on capital outflows are likely to delay overseas acquisitions and investment plans by the country at a time when many companies are scouting markets abroad to beat the domestic economic slowdown, bankers and companies said.

In its latest move to curb dollar outflows and stem the rupee's slide, the central bank on Wednesday cut the overseas investment limit for companies to 100% of their net worth from 400%, and further curbed gold imports.

Any foreign investment more than 100% of a company's value would require central bank approval. Large state companies were exempted from the rules, which came into effect immediately.

"It definitely will have a serious impact on M&A," said Harish HV, head of corporate finance practice at advisory Grant Thornton in India.

"These sort of sudden measures will derail a lot of strategies people have put in place for their businesses."

The rupee fell to a record low on Friday on fears the latest curbs, brought in by policymakers struggling to defend the currency in a slowing economy and a toughening global investment, could spook foreign investors.

Bankers and companies slammed the restrictions on firms, some of whom have been looking to expand beyond India where the economy is growing at its slowest pace in a decade, hitting demand for products ranging from cars to steel.

"Ironic that we have controls on capital on Independence Day. Feels like the 1980s," Anand Mahindra, chairman of India's diversified Mahindra & Mahindra, said in a Twitter post.

Faced with a balance of payment crisis, India prized open the economy in 1991.

Reverse Gear

Chandrajit Banerjee, the director general of the Confederation of Indian Industry, said the restrictions would dampen India's global aspirations and said he hoped the measures would soon be reversed.

Backed by cheap loans, some of the companies in the recent past have acquired companies much bigger than themselves.

Apollo Tyres in June agreed to pay $2.5 billion for New York-listed Cooper Tire & Rubber, a company nearly three times bigger its size, to help boost overseas revenue.

Apollo, whose acquisition is yet to be completed, said in a statement it had been advised the latest measures apply to new overseas investment proposals and would not affect the Cooper deal.

The deal was done via overseas units and papers were filed with the central bank well before the restrictions were announced, Apollo said.

Some drugmakers including Sun Pharmaceutical Industries and auto parts makers have been looking for overseas targets much bigger than themselves to become global players, several investments bankers told Reuters.

The head of investment banking at a large U.S. bank, who asked not to be identified, said the curbs added another layer of paperwork.

"Many companies may just delay their plans hoping these are short-term measures," the banker said.

The move could lead to a fall in India M&A deal volume this year compared with 2012, said the banker. "The intention seems to be stem the flow of every single discretionary flow of dollar outside the country."

Completed M&A deals involving India declined 62% to $18.3 billion last year, compared with 2011, making it the lowest annual volume since 2005, according to Thomson Reuters data.