GUIDELINES
1) The public sector financial institutions, State Bank of India and all other banks in India are eligible for setting joint ventures and the D.E ratio should be 1:1.5
2) The venture capital companies and venture capital funds can be set up as joint venture between stipulated agencies and non institutional promoters but equity holding of promoters should not exceed 20 percent
3) The venture capital should provide not more than Rs.10 crores as financial assistance to new enterprises.
4) The venture Capital company or the venture capital funds should be managed by professionals.*
Venture capital can be listed according to the prescribed norms and underwriting of issues is to be done at promoter’s discretion.
6) A person holding a position or full time chairman/ president, chief executive, managing director or executive director/ whole time director in a company will not be allowed to hold the same position simultaneously in VCC/ VCF.
7) The venture capital firms will not be able to undertake activities such as trading, brooking, money market operations, bills discounting, inter corporate lending. Venture capitals can invest in leasing to the extent of 15% of the total funds.
REGULATIONS
Important regulations of Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 are:
Any company or trust or body corporate or a foreign VC Fund to carry on any activity as a venture capital fund should apply to SEBI.*
The venture capital fund shall not carry on any other activity other than that of a venture capital fund.
A venture capital fund may raise monies from any investor whether Indian or Foreign or Non resident Indians by way of issue of units.
Minimum sum acceptable by VC Fund from any investor is Rs. 5 lakhs.
*
Each scheme launched or fund set up by a venture capital fund shall have firm commitment from the investors for contribution of an amount of at least Rupees Five Crore before the start of operations by the venture capital
On Investment:
Venture capital fund should disclose the investment strategy at the time of application for registration.
Venture capital fund should not invest more than 25% corpus of the fund in one venture.
Venture capital should not invest in the associated companies.
At least 75% of the investible funds should be invested in unlisted equity shares or equity linked instruments.
Not more than 25% of the investible funds may be invested by way of subscription to initial public offer of a venture capital undertaking whose shares are proposed to be listed subject to lock-in-period of one year.
Venture capital fund is not permitted to get its units listed on any recognized stock exchanges for first three years from the issuance of units by the venture capital fund.
*
Venture capital fund are not permitted to issue any document or advertisement inviting offers from the public for the subscription or purchase of any of its units.
*
A venture capital fund may receive monies for investment in the venture capital fund only through private placements of its units.
*
Venture capital fund should maintain proper books of accounts as per the law.
1) The public sector financial institutions, State Bank of India and all other banks in India are eligible for setting joint ventures and the D.E ratio should be 1:1.5
2) The venture capital companies and venture capital funds can be set up as joint venture between stipulated agencies and non institutional promoters but equity holding of promoters should not exceed 20 percent
3) The venture capital should provide not more than Rs.10 crores as financial assistance to new enterprises.
4) The venture Capital company or the venture capital funds should be managed by professionals.*
Venture capital can be listed according to the prescribed norms and underwriting of issues is to be done at promoter’s discretion.
6) A person holding a position or full time chairman/ president, chief executive, managing director or executive director/ whole time director in a company will not be allowed to hold the same position simultaneously in VCC/ VCF.
7) The venture capital firms will not be able to undertake activities such as trading, brooking, money market operations, bills discounting, inter corporate lending. Venture capitals can invest in leasing to the extent of 15% of the total funds.
REGULATIONS
Important regulations of Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 are:
Any company or trust or body corporate or a foreign VC Fund to carry on any activity as a venture capital fund should apply to SEBI.*
The venture capital fund shall not carry on any other activity other than that of a venture capital fund.
A venture capital fund may raise monies from any investor whether Indian or Foreign or Non resident Indians by way of issue of units.
Minimum sum acceptable by VC Fund from any investor is Rs. 5 lakhs.
*
Each scheme launched or fund set up by a venture capital fund shall have firm commitment from the investors for contribution of an amount of at least Rupees Five Crore before the start of operations by the venture capital
On Investment:
Venture capital fund should disclose the investment strategy at the time of application for registration.
Venture capital fund should not invest more than 25% corpus of the fund in one venture.
Venture capital should not invest in the associated companies.
At least 75% of the investible funds should be invested in unlisted equity shares or equity linked instruments.
Not more than 25% of the investible funds may be invested by way of subscription to initial public offer of a venture capital undertaking whose shares are proposed to be listed subject to lock-in-period of one year.
Venture capital fund is not permitted to get its units listed on any recognized stock exchanges for first three years from the issuance of units by the venture capital fund.
*
Venture capital fund are not permitted to issue any document or advertisement inviting offers from the public for the subscription or purchase of any of its units.
*
A venture capital fund may receive monies for investment in the venture capital fund only through private placements of its units.
*
Venture capital fund should maintain proper books of accounts as per the law.