SEBI allows AIF, VCs to invest up to ₹1.5 billion overseas

Earlier, the cap was pegged at $750 m

SEBI on Friday doubled the overall limit for overseas investments by alternative investment funds and venture capital to $1,500 million (around ₹10,000 crore). These categories of funds can now invest up to $1,500 million in overseas markets. Earlier the cap was at $750 million.

“All other regulations governing such overseas investment by eligible AIFs/VCFs shall remain unchanged,” SEBI circular said.

Wider access

Experts say, AIFs and VCFs will have a wider access to overseas investment opportunities coupled with the scope for generating better returns globally.

“It shall better position AIFs and VCs to hedge their overall investment risk. AIFs and VCFs shall get the benefit of diversification and at the same time the investors shall be protected from fluctuations in returns due to concentration of investments in a particular sector or economy,” said Prashaant Vikram Rajput, Partner, White & Brief Advocates and Solicitors.

Many large domestic brokers have registered AIFs and VCs who will benefit from it.

Alternative Investment Fund or AIF means any fund established or incorporated in India, which is a privately pooled investment vehicle that collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors.

Dated: May 22, 2021

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