According to the SEBI Amendment Act on 26th January, 1995, venture capital funds which were hitherto under the purview of the Finance Ministry, have been brought under the governance of SEBI.
Some of the organisations which provide venture cpaital assistance are TDICI, RCTC, Twentieth Century Venture Capital Corporation and Credit Capital Venture Corporation Ltd. Equity participation by venture capital institutions is restricted to 49% of the company's paid up capital. The rest of the funding is given in the form of term loans. Assistance is limited to those projects where the total investment does not exceed Rs.100 million. Venture capital assistance is also provided by the IDBI for encouraging commercial application of indigenously developed technology and for adapting imported technology to wider domestic applications. While venture capital is provided mainly in the form of unsecured loans carrying commercial rates of interest, IDBI can also provide venture capital assistance in the form of equity capital. IDBI's venture capital assistance is limited to projects costing between Rs.0.5 million to Rs.1.5 million.
Centre for Monitoring Indian Economy, Bombay
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Last updated: May 1995.