INVESTMENT CRITERIA FOR A FOREIGN VENTURE CAPITAL INVESTOR :
All investments to be made by a foreign venture capital investors should be subject to the following conditions:
(a) it should disclose to SEBI its investment strategy.
(b) it can invest its total funds committed in one venture capital fund or alternative investment fund.
(c) it shall make investments as enumerated below:
(i) atleast 66.67% of the investible funds should be invested in unlisted equity shares or equity linked instruments of venture capital undertaking or investee company.
(ii) not more than 33.33% of the investible funds may be invested by way of:
(a) subscription to initial public offer of a venture capital undertaking or investee company whose shares are proposed to be listed;
(b) debt or debt instrument of a venture capital undertaking or investee company in which the foreign venture capital investor has already made an investment by way of equity.
(c) preferential allotment of equity shares of a listed company subject to lock in period of one year.
(d) Special Purpose Vehicles which are created for the purpose of facilitating or promoting investment in accordance with these Regulations.The investment conditions and restrictions stipulated shall be achieved by the Foreign Venture Capital Investor by the end of its life cycle.
(f) It shall disclose the duration of life cycle of the fund.