| Particulars |
Details |
| Size of financial assistance |
Rs. 10 lakhs to Rs. 15 Crore.
Aggregate assistance not more than two times the current net worth of the Company.
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| Tenure of financial assistance |
Up to 10 years including moratorium period in case of debentures.
In case of equity, decision for exit would be taken on case-to-case basis with maximum tenure up to 10 years. |
| Instruments for investment |
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A. Shares (CCPS) (maximum up to 25% of the corpus) can be invested subject to thefollowing:
- i. Such investment may be limited to innovative Technology-oriented projects/start-ups fulfilling the conditions mentioned under Eligibility Criteria;
- ii. The maximum equity investment in a company can be 49%, subject to maximum investment of Rs.5 crore;
- iii. Such investment shall be at face value of shares in every company, subject to applicablelaws;
- iv. In every investment under the Fund, minimum 25% investment shall be in the form of debentures.
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B. Compulsorily Convertible Debentures (CCDs), Optionally Convertible Debentures (OCDs), Non-Convertible Debentures (NCDs), etc. These instruments shall be considered for all companies who are not falling underthe category A above.
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C. Out of total financial assistance maximum 20% of assistance should be earmarked for working capital gap funding for next 10 years:
- a. Such assistance shall not be of revolving nature. Quantum of such assistance shall be approved by Investment Committee as per the requirement of the project, on case-to-case basis.
- b. Such assistance may also be extended to the existing beneficiaries under the Fund subject to the following conditions:
i. The account should be standard.
ii. The beneficiary company should have applied to nationalized/ private / cooperative Banks for working capital assistance and the assistance sanctioned is either less than the required as per the project cash flow estimates or such banks have denied the assistance on any ground other than the feasibility. This assistance shall be within the overall funding pattern of the Fund.
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| Funding Pattern |
Investment under the fund will be categorized as follows:
- • Financial assistance upto Rs.5 Crore - Investment under this category shall be funded maximum upto 75% of the project cost and the balance 25% of the project cost will be funded by the promoters or through Govt subsidy under various schemes of central or stateGovt.;
- • Financial assistance above Rs. 5 Crore – Investment under this category shall be funded maximum upto 50% of the project cost. At least 25% of the project cost shall be funded by promoters or through Govt subsidy under various schemes of central or state Govt., and balance 25% of the project cost can be funded either by promoters or by the bank or any other Financial Institutions asthe case may be.
- • In cases where Govt. subsidy is available, the promoters will have to contribute at least 15% of the project cost
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| Moratorium period for redemption of principal |
In case of debentures, on case to case basis but not more than 36 months from the date of investment. Interest payment shall commence from date of investment in the Company at a regular interval as determined by the Investment Committee |
| Moratorium period for redemption of principal |
On case to case basis but not more than 36 months from the date of investment in the Company. However, interest/ coupon payment shall commence from date of investment in the Company at a regular interval as determined by the Investment Committee of the fund. |
| Returns/ Coupons/ Interest for financial assistance |
a. In Equity investment, return at the time of exit by way of buyback / strategic investment / IPO shallbe 8% p.a. or as per the valuation whichever is higher.
b. Debt/Convertible Instruments - 4% p.a. (For women*/disabled** entrepreneurs - 3.75% p.a.)
[*For considering a company owned by a SC women entrepreneur, the SC women entrepreneur should hold at least 51% of the shareholding in the company and should be the Managing Director of theCompany;
**In the case of disabled entrepreneurs, guidelines issued by the Department of Divyang Welfare for qualifying as disabled would be followed.]
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| Exit Mechanism |
• Exit through payments out of operations, buyback/ redemptions by promoters/ companies, strategic investments, listing on stock exchanges or any other exitprocess.
• Exit process shall be determined on case to case basis depending on the nature of financial assistance and performance ofthe company.
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| Security |
The following securities may be envisaged during the investment:
- a. The assets of the project being funded/ assisted under the scheme shall be charged for security. The project assets will include land, building, plant & machinery and rights on licenses/patents.
- b. Pari-pasu charge on assets with the Banks/FIs in case of the companies applying for loan with banks/ FIs on case to casebasis.
- c. 2nd charge of the assets created out of the investment where the 1st charge in held by the Bank/FIs.
- d. Pledge of Shares held by promoters and forming atleast 26% stake and upto 51% of the Issued and Paid up capital shall betaken.
However, the percentage of pledged shares would be decided on case to case basis.
- e. In addition to the charge on assets, Post-dated Cheques (PDCs)/ Electronic Clearing Service (ECS) and promissory notes shall betaken.
- f. Personal guarantees of the promoters along with buyback agreement shall beentered.
- g. In case no mortgage in the form of project land is available, the borrower may arrangecollateral securities.
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