Regulation 11 - Investment Criteria for a Foreign Venture Capital Investor. - Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations 2000

CHAPTER III NVESTMENT CONDITIONS AND RESTRICTIONS Investment Criteria for a Foreign Venture Capital Investor. 11. All investments to be made by a foreign venture capital investors shall be subject to the following conditions:- (a) it shall disclose to the Board its investment strategy. (b) 1 [* * *] it can invest its total funds committed in one venture capital fund 2 [or alternative investment fund] 3 [***]. (c) it shall make investments 4 [* * *] as enumerated below: (i) atleast 5 [66.67%] of the investible funds shall be invested in unlisted equity shares or equity linked instruments 6 [of 7 [venture capital undertaking or investee company as defined in clause (o) of sub-regulation (1) of regulation 2 of Securities and Exchange Board of India (Alternative Investment Funds) Regulation, 2012]; (ii) not more than 8 [33.33%] of the investible funds may be invested by way of: (a) subscription to initial public offer of a 9 [venture capital undertaking or investee company as defined in clause (o) of sub-regulation (1) of regulation 2 of Securities and Exchange Board of India (Alternative Investment Funds) Regulation, 2012] whose shares are proposed to be listed 10 [* * *]; (b) debt or debt instrument of a 11 [venture capital undertaking or investee company as defined in clause (o) of sub-regulation (1) of regulation 2 of Securities and Exchange Board of India (Alternative Investment Funds) Regulation, 2012] in which the 12 [foreign venture capital investor] has already made an investment by way of equity; 13 [(c) preferential allotment of equity shares of a listed company subject to lock in period of one year. Explanation 1. For the purposes of these regulations, a financially weak company means a company, which has at the end of the previous financial year accumulated losses, which has resulted in erosion of more than 50% but less than 100% of its networth as at the beginning of the previous financial year; (d) it shall disclose the duration of life cycle of the fund; (e) special purpose vehicles which are created for the purpose of facilitating or promoting investment in accordance with these Regulations. Explanation. The investment conditions and restrictions stipulated in clause (c) of regulation 11 shall be achieved by the Foreign Venture Capital Investor by the end of its life cycle.] ************* NOTES:- 1 Word while omitted by the SEBI (Foreign Venture capital Investors) (Amendment) Regulations, 2004, w.e.f. 5-4-2004. 2 Inserted by the SEBI(Alternative Investment Funds) Regulations, 2012 w.e.f. May 21, 2013. 3 Words it shall however not invest more than 25% of the funds committed for investments to India in one Venture Capital Undertaking omitted by the SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2004, w.e.f. 5-4-2004. 4 Words in the Venture Capital Undertaking omitted, ibid. 5 Substituted for 75% , ibid. 6 Inserted, ibid. 7 Substituted by the SEBI(Alternative Investment Funds) Regulations, 2012 w.e.f. May 21, 2013 for the words Venture Capital Undertaking . 8 Substituted for 25% , ibid. 9 Substituted by the SEBI(Alternative Investment Funds) Regulations, 2012 w.e.f. May 21, 2013 for the words Venture Capital Undertaking . 10 Words subject to lock-in period of one year omitted, ibid. 11 Substituted by the SEBI(Alternative Investment Funds) Regulations, 2012 w.e.f. May 21, 2013 for the words Venture Capital Undertaking . 12 Substituted for Venture capital fund by the SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2001, w.e.f. 7-6-2001. 13 Inserted by the SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2004, w.e.f. 5-4-2004.