Sebi raises overseas investment limit of AIFs, VCFs to $750 million

Markets regulator Sebi on Tuesday enhanced the overseas investment limit of alternative investment funds and venture capital funds to $750 million from the current $500 million.

The decision has been taken in consultation with the Reserve Bank of India, the Securities and Exchange Board of India (Sebi) said in a circular.

In order to monitor the utilisation of overseas investment limits, Sebi has asked AIFs and VCFs to mandatorily disclose the utilisation of the such limits within 5 working days of such usage on the regulator's intermediary portal.

In case an alternative investment fund (AIF) or venture capital fund (VCF) has not utilised the overseas limit granted them within 6 months from Sebi's approval, the same will have to be reported within 2 working days after expiry of the validity period.

"In case an AIF or VCF has not utilized a part of the overseas limit within the validity period, the same shall be reported within 2 working days after expiry of the validity period," the regulator noted.

Further, if an AIF or VCF wishes to surrender the overseas limit at any point of time within the validity period, the same will have to be reported within two working days from the date of decision to surrender the limit, it added.

The regulator said it has decided to enhance the overseas investment limit of AIFs and VCFs to $750 million.

Earlier in October 2015, the regulator had allowed overseas investment by AIFs and VCFs to the extent of $500 million.

AIFs are funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy, while VCFs are investment funds that manage the money of investors who seek private equity stakes in startups.