SEBI: Amended norms for venture capital funds
New Delhi: The Securities and Exchange Board of India has changed its existing regulations on venture capital funds and foreign venture capital investors. Funds will now be allowed to invest in financially weak companies or listed sick industrial companies. Changes have also been made in the minimum investment limit norms.

SEBI-registered venture capital funds/foreign venture capital investors have now been permitted to invest in real estate. They have also been allowed to invest in companies engaged in gold financing for jewellery. SEBI has also allowed investment in the Reserve Bank of India-registered non-banking finance companies (NBFC) that have been categorised as equipment leasing or hire-purchasing companies.

These changes are in line with the recommendations made by the SEBI-appointed Advisory Committee on Venture Capital, which was chaired by Dr Ashok Lahiri, Chief Economic Advisor in the Ministry of Finance. With regard to the investment conditions for venture capital funds, a fund now needs to invest at least 66.67 per cent of its investible funds in unlisted equity shares or equity-linked instruments. Hitherto, they were required to invest at least 75 per cent. Under the remaining portion of 33.33 per cent or less, the SEBI has now permitted such funds to subscribe to initial public offering of a venture capital undertaking without any lock-in-period for such shares after they are listed.

They funds have also been permitted to invest in the equity shares or equity linked instruments of a "financially weak company" or a sick industrial company whose shares are listed. The funds can also now invest in the special purpose vehicles, which are created by them for the purpose of facilitating or promoting investments.
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`AAAF' rating from CRISIL for Chola Funds
Mumbai: CRISIL has assigned an `AAAF' rating to the Chola Liquid Fund and the Chola Daily Dividend Reinvestment Plan. These are bond funds managed by the Cholamandalam AMC.
The rating indicates that their portfolio holdings provide very strong protection from credit defaults, stated the press release.
Chola Liquid Fund has a corpus of Rs 418 crore as of March 31, 2004.
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