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April 2012

A.P. (DIR Series) Circular No. 93, dated 19-3- 2012 — Investment in Indian Venture Capital Undertakings and/or domestic Venture Capital Funds by SEBI registered Foreign Venture Capital Investors.

By Gaurang Gandhi, Chartered Accountant
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Presently subject to certain terms and conditions, a SEBI-registered Foreign Venture Capital Investor (FVCI) can invest in equity, equity linked instruments, debt, debt instruments, debentures of an Indian Venture capital Undertaking (IVCU) or of a Venture Capital Funds (VCF) through Initial Public Offer or Private Placement or in units of schemes/funds set up by a VCF.

This Circular permits, subject to certain terms and conditions, all FVCI to invest in eligible securities (equity, equity-linked instruments, debt, debt instruments, debentures of an IVCU or VCF, units of schemes/funds set up by a VCF) by way of private arrangement/ purchase from a third party also. This Circular further clarifies that, subject to certain terms and conditions, SEBI-registered FVCI are also permitted to invest in securities on a recognised stock exchange.

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