Sebi approves introduction of special funds for investment in stressed assets


The regulator has stated that the minimum investment by an investor can be 10 crore, while it can be ₹ 5 crore in the case of an accredited investor, and that the minimum corpus will be ₹ 100 crore.

The Securities and Exchange Board of India (Sebi), at its board meeting on Tuesday, approved the introduction of special situation funds (SSF) for investments limited to only stressed assets with a minimum corpus of 100 crore . SSFs will be introduced in Category I of alternative investment funds as a sub-category, the regulator said.

SSFs may invest in stressed assets such as stressed loans available for acquisition in accordance with Reserve Bank of India guidelines, 2021, or as part of a resolution plan approved under the Insolvency Code and bankruptcy, 2016. In addition, they may invest in securities received. issued by Asset Reconstruction Companies (ARCs) and troubled company securities, Sebi said.

The regulator has stated that the minimum investment by an investor can be 10 crore, while it can be ₹ 5 crore in the case of an accredited investor, and that the minimum corpus will be ₹ 100 crore. The newly announced funds will be exempt from the concentration standard of investments in a single issuing company and there will be no restriction on the investment of their funds invested in unlisted or listed securities of the issuing company.

The overall size of the AIF industry exceeded 5 lakh crore at the end of September, according to data available from Sebi. Analysts say investors are betting on several investments in addition to traditional investments. The AIF industry is also expected to grow in the coming years and could reach around 30 lakh crore over the next 10 years, according to a report.

The regulator has also made changes to other regulations, including stricter standards for primary markets, approving the closure of mutual funds and streamlining settlement regulations.

Financial Express is now on Telegram. Click here to join our channel and stay up to date with the latest news and updates from Biz.

About Arla Lacy

Check Also

“It’s not a viable market.” The insurance crisis hits Florida.

Three years ago, FedNat Insurance Co. decided it was a smart business strategy to expand …