By June 21, 2013 Read More →

SEBI slated to notify investment norms for angel funds on June 25

Markets regulator Securities and Exchange Board of India (SEBI) is set to announce investment norms for angel funds on June 25, reports Moneycontrol, via CNBC-TV18, quoting sources. This follows a proposal in Union Budget 2013 earlier to recognize angel investor pools as Category I AIF venture capital funds under SEBI, pending the notification of rules by the markets regulator.

The likely list of norms to be announced on June 25 are as follow:

  • Investment per company to be limited to Rs 50 lakh-Rs 5 crore (under than $1 million)
  • Investee companies should be less than three years old
  • Funds will have to stay invested for at least three years
  • Investee company should be unlisted and revenues must not exceed Rs 25 crore
  • Investee company must not be related to a larger corporate entity with revenues of more than Rs 300 crore
  • Angel fund must not have any family connection with the investee company
  • No angel scheme or pool may have more than 49 investors

Category I AIF venture capital funds under SEBI are able to avail of a pass-through under the Income Tax Act. The budget provided that angel funds who are recognized as category I AIF venture capital funds will also enjoy the pass through status.

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