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ARTICLE · 18 JULY 2024

SEBI's Latest Move: A Game Changer For Alternative Investment Funds In Infrastructure

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In a move to consider the concerns of the Investee Companies wherein the Alternative Investment Funds (AIFs) are also one of the equity holders, the Securities and Exchange Board of India (SEBI) permitted...

IndiaFinance and Banking
Daizy Chawla
Daizy Chawla
Priyanka Chuphal
Priyanka Chuphal
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In a move to consider the concerns of the Investee Companies wherein the Alternative Investment Funds (AIFs) are also one of the equity holders, the Securities and Exchange Board of India (SEBI) permitted that such AIFs to create encumbrance on equity holdings in favor of lenders to respective investee companies. AIFs are private pooled investment vehicle that collects funds from Investors for deploying them in accordance with a defined investment policy (scheme) for the benefit of its investors.

At the moment permission accorded by SEBI is w.r.t Infrastructure Investee Companies (except foreign investee company) that too by only creating pledge on the equity investments held by Category I and II AIFs. Category I and II AIFs shall not give any form of guarantee for the investee company.

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