Ankit Sharma

SEBI's Stance on VCF Tenure Extensions: A Key Lesson for Fund Managers and Trustees In a recent adjudication order, SEBI has reinforced the strict regulatory boundaries around the lifecycle of Venture Capital Funds (VCFs) under the erstwhile VCF Regulations. Though this case pertains specifically to VCF Regulations, the principles laid down here are also applicable under the current AIF Regulations. Here's a quick breakdown of the case : 1. Fund Tenure Basics: The scheme's Private Placement Memorandum (PPM) outlined a 7-year term from the first closing, extendable by up to 2 years (in two 1-year periods) with super-majority investor approval. 2. What Happened: The fund extended beyond this—adding another 4 years (total extensions: 6 years)—with super-majority consent from investors . The rationale? Delays in exiting 4 residual investments due to external factors like COVID-19 and market conditions. The fund successfully exited two of these profitably, providing over 125% return on capital to investors so far, and handled the last two via in-specie distribution. Notably, no management fees were charged during these extensions, and the fund emphasized acting solely in investors' interests. 3. Fund's Defense: They argued the extensions were investor-driven, caused no harm, and were beyond their control. They even voluntarily applied for settlement with SEBI, wound up the scheme, and surrendered registration before formal action. 4. SEBI's View: Despite investor consent and benefits, SEBI deemed this a substantive violation—not just technical or academic. The tenure in the PPM isn't merely a commercial agreement; it's a regulatory mandate. Upon expiry (including permitted extensions), winding up is mandatory under Reg 23(1)(a), with proceeds distributed within 3 months per Reg 24(2) of VCF Regulations. Extensions beyond the PPM's limits contravene the regs, regardless of consensus. 5. Trustee's Role: The trustee was held accountable for not promptly directing the fund to initiate winding up when the original tenure ended . While their powers are limited to fund documents and they don't handle day-to-day decisions, SEBI stressed their fiduciary duty to ensure compliance as guardians of investor interests. 6. Outcome: Joint and several penalty of ₹10 lakhs on the fund and investment manager; separate ₹10 lakhs on the trustee. Key Takeaways: First, investor consent does not override regulatory compliance. Second, trustees cannot remain silent when tenure expires. Their fiduciary duty includes ensuring the fund meets its fundamental obligations even if commercial decisions rest with the investment manager. Third, good intentions and good outcomes do not cure violations. No management fees, profitable exits and investor satisfaction are mitigating factors at best. They do not erase the underlying breach or immunise the parties from penalties.

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Excited to announce our investment in Mediversal Healthcare. The Company, led by Navneet Ranjan Bhanu Pratap and Jayant Gandhi has done pioneering work in making high quality healthcare accessible and affordable in Bihar. https://lnkd.in/dnbEiiUB

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Aavishkaar Capital has a long history in financial inclusion but like anything that is in excess creates its problem, over in-debtness is the fallout. FREED is the representation of the over indebted borrower helping them find their way to deal with current debt and find a way back to Financial Re-inclusion congratulations to everyone a big new step in impact investing and a small step in our journey of inclusion

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India’s startup ecosystem is entering a new phase where liquidity, continuity, and investor confidence finally converge. Know more about Blume Ventures latest Secondary Exit.

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Mirae Asset Venture Investments (India), backer of startups such as Ola, Eternal (formerly Zomato), Shadowfax, Bigbasket and Dhan, has appointed Puneet Kumar as its CEO. Prior to this appointment, Kumar was managing director of Steadview Capital. https://lnkd.in/gTZQTDUG

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>>I agree with the main proposition in this article by Anil Sood in today's TNIE, that the budget speech by the FM indicates that the GOI is 'walking away from its responsibility to shepherd the economy to calmer waters'. He sums up the budget numbers in eight points that show a smaller role of the state in all major budget numbers regarding revenues, tax revenues, and non-tax revenues all of which are a smaller share of GDP compared to the previous year! As a result, aggregate expenditure is also set to fall in the coming year! >>The nominal growth of the GDP is estimated to be 10%. The share of states in tax revenues as a share of GDP is also projected to fall. The GDP equation is: Y= I + C + G +/- I/E. If I/E is uncertain (given the headwinds in the global economy), and C and I are sluggish, it is left to the state to inject dynamism and investment into the economy through higher level of G. This budget however indicates that is not going to happen. Then where is the growth of GDP going to come from? >>I would have expected the state to play a bigger role in the coming year, to compensate for the sluggishness in the private sector investment and household consumption spending. It is shocking that the state, by deliberate plan, proposes to shrink its role. Is this due to pressure from free market neo-classical fundamentalists who will not allow the state to play a meaningful role even in an economy like India's? Is this a genuflection to the ratings agencies in an effort to earn some brownie points? As the writer goes on to state: 'The Economic Survey has already conceded that Indian business is neither in a position nor willing to do the heavy lifting'. >>Where does that leave the states like Kerala? I am afraid the answer to that question will not be reassuring. In such a situation, where the role of the state is being shrunk as a deliberate policy, state governments will struggle to mobilise the resources needed for the supply of public services that are the responsibility of the states. It can only be hoped that the 16th Finance Commission takes an enlightened view on devolution of financial resources, and also enables the states and LSGIs to raise the resources needed from the market through public borrowing. >>In a country with so many unemployed and underemployed resources, why should the state be shy about resorting to deficit financing to fund infrastructure and other important projects and programs? Babu Mohanan; Viju Parameshwar; Vikram Nehru; Anuradha Nehru; Arun Kumar; Gulrez Hoda; Anand MS; Anooja Bashir; P Rajeev; John Muthoot; Aju Jacob; JEIKRISHNAN BALAKRISHNAN; Thankam Joseph; C. Padmakumar;

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Blume Ventures ₹175 Cr secondary exit highlights how secondary liquidity is expanding opportunities for both investors and founders to share success more dynamically. Read more in the latest Investina article.

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Deeptech founders don’t just build companies; they build knowledge, IP, and new possibilities. This is how ecosystems transform. Amit Chand Karan Verma Aditya Arora #deeptech #venturecapital

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🌟 Unlocking Hidden Gems: Why Nano-Caps (<₹250 Cr) on India’s Main Board Are the Next Turnaround Playground 🌟 When small companies in India go public, they aspire to unlock value for all stakeholders — dream of scale, visibility, and a market cap of ₹1,000 Cr and beyond. In the glittering bazaar of Dalal Street, mega-caps steal the spotlight. But beneath the surface? Over 2,000 listed companies on the NSE/BSE main board with market caps under ₹250 crore – nano-caps brimming with untapped potential, yet often adrift in stagnation. These aren’t relics; they’re rockets grounded by inertia. Last week, deep dives with promoters from textiles and infra revealed a seismic shift: next-gen leaders are stepping up, hungry for turnarounds that could 5x value in 3 years These are the missed opportunities. Many of these businesses started with strong intent — industries like textiles, engineering, and commodities — but couldn’t sustain momentum. Over time, market dynamics changed, capital cycles shifted, and managements often settled into comfort zones rather than reinventing. Opportunities aren’t scarce; comfort zones are. Promoters who shatter them – via bold M&A, digital pivots, or ESG infusions – don’t just survive; they soar. As India’s GDP hums at 7%+, these nano-caps offer asymmetric bets: low entry valuations (P/E <10x), high growth levers (CAGR 20%+), and liquidity ramps post-turnaround. Last week, I met a few promoters. Interestingly, the next generation is now entering the picture with a new mindset — thinking about turnarounds, digitalisation, and scalable growth. Let me share a few contrasting examples: • Textiles Tale: An SME peer eyes ₹20-25 Cr profits → ₹500 Cr cap via sustainable exports & tech weaves. Yet a main-board counterpart limps at ₹4-5 Cr EBITDA & ₹60 Cr valuation – same industry tailwinds (PLI scheme, global demand), worlds apart in execution. • Infra Insights: One SME infra firm surges from ₹300 Cr to ₹1,000 Cr trajectory on EPC diversification. Its main-board sibling? ₹3-4 Cr profits, ₹100 Cr cap frozen – ignoring Gati Shakti’s ₹11L Cr bounty. The difference? 👉 It’s not about the sector or size. 👉 It’s about the promoter’s vision, execution capability, and willingness to come out of the comfort zone. India’s next phase of value creation may not come from unicorns alone — but from these nano-cap companies (market cap < ₹250 Cr) that can transform with strategic capital, professional management, and renewed ambition. For Investors: Nano-caps offer asymmetric upside—but demand due diligence on promoter track records. I’ve seen these journeys up close: from family fiefdoms to market movers. If you’re part of any of such company ,impact investing, or advisory – DM me. Let’s co-create the next ₹1,000 Cr story. Who’s ready to step out of their comfort zone? #NanoCapTurnarounds #IndiaMarkets #PromoterVision #ValueUnlocking #SMEIPO #NanoCap #ValueCreation #IndianEquity #Entrepreneurship #Turnaround #SMEtoMainboard

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Every VC wants high returns and high risk — basically, they want to invest in a rocket ship before it’s even built. But here’s the twist — India’s VC ecosystem is still figuring out where to buy the rocket fuel. Unlike the US, where decades of exits have created deep pockets and deeper risk appetites, we’re still on our early missions. And that’s not a bad thing. Every giant ecosystem once started with small, nervous steps (and a few burnt fingers). Once Indian investors start seeing more wins, trust me — the bets will get bolder, and the stories will get crazier. We may be a younger ecosystem, but we’ve got the hustle, heart, and hunger to go from “emerging” to “exploding.”

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Eternal Capital (India), an early-stage VC fund started by former bharatpe COO Dhruv Dhanraj Bahl, has rebranded itself as Sadev Ventures. The firm said the new name aligns with its family office identity and values. With this change, Sadev Ventures will continue its India-first focus while also helping portfolio companies expand globally through support from international LPs and strategic partners. Read full article link in the commment 👇 #sadevventures #eternalcapital #vc #rebrand #startupnews

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💡 The Valuation Email That Defined Zomato’s IPO — And Why It Still Matters Just read this brilliant Economic Times piece about Sanjeev Bikhchandani’s now-famous email to Deepinder Goyal before Zomato’s IPO — and it reminded me why valuation discipline is not optional; it’s foundational. Bikhchandani’s message was simple yet profound: “Don’t let valuation greed destroy long-term value. Leave enough on the table for investors.” That one line has echoed across time — and should be framed in every boardroom contemplating an IPO. ⸻ 🧭 My Take as an Investor and Advisor Too many IPOs today are priced for perfection — leaving little room for investors to see upside for years. When valuations are stretched: • Early investors exit. • Retail and HNI investors enter… and wait, often painfully long, for reality to catch up with price. • The market eventually corrects — not because the business is bad, but because the price was wrong. We’ve also seen pre-IPO deals sold in the frenzy of exclusivity — without clarity, liquidity, or governance. Many investors have money stuck for years, victims of hype over homework. The truth is: Wealth isn’t built on noise. It’s built on numbers, patience, and prudence. ⸻ 🏦 The Bajaj Capital La Premier & Securities Philosophy At Bajaj Capital La Premier and Bajaj Capital Securities (our investment banking arm), our philosophy is clear: • Fair valuation is sacred. Every successful IPO leaves something on the table for investors, ensuring long-term goodwill and sustainable growth. • The right institutional investors matter. They bring not just capital, but credibility and continuity. • Choose an investment banker who truly cares — for both the company and the investor. One who aligns price with potential, not just with market mood. Our teams have worked closely with companies preparing to go public — helping them structure offerings that are fair, respected, and sustainable. When an IPO is done right, everyone wins: • The company raises growth capital. • Investors earn trust and returns. • The market gets stronger faith in the system. ⸻ 🔍 My Message to Investors and Entrepreneurs To investors: Stay alert. Not every IPO deserves your enthusiasm. Look for pricing discipline and integrity — they are the true moat. To entrepreneurs: When you decide to take your company public, partner with those who balance vision with valuation, growth with governance. That’s what creates enduring wealth and credibility in public markets. If you’re considering your own IPO journey, our Bajaj Capital Securities team would be delighted to help you structure it the right way — with rigor, fairness, and trust. ⸻ #sanjivbajaj #sanjivbajajbajajcapital Sanjeev Bikhchandani Deepinder Goyal Zomato InfoEdge BajajCapital La Premier Bajaj Capital Ltd Preeti Swaroop Prashanth Kumar #IPO #Valuation #WealthCreation #HNI #RetailInvestors #InstitutionalInvestors #InvestmentBanking #CapitalMarkets #LongTermInvesting

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🇮🇳 RBI’s New Lending Reforms: Unlocking India’s Credit Engine for the Next Decade India’s financial sector has entered a defining moment. The Reserve Bank of India (RBI) has announced a series of transformational lending reforms designed to empower banks, NBFCs, and capital markets — and set the tone for the country’s next phase of inclusive and innovation-led credit growth. While the repo rate remains unchanged, these changes go far beyond monetary policy. They target the very foundation of financial flow — liquidity, capital efficiency, and accessibility — ensuring that every segment of India’s economy, from startups to MSMEs, can grow faster and smarter. 1️⃣ Loan Against Shares (LAS): Unlocking Investor Liquidity The lending cap against shares has jumped from ₹20 lakh to ₹1 crore per individual. ➡️ Example: An investor with ₹2 crore in listed shares can now access ₹1 crore in credit without liquidating holdings. 💡 Impact: Banks can now compete directly with NBFCs; investors gain liquidity without selling assets, fueling greater market participation. 2️⃣ IPO Financing Limit Raised IPO funding through banks has doubled from ₹10 lakh to ₹25 lakh per investor. ➡️ Example: HNIs can leverage bank credit to take stronger positions in public offerings. 💡 Impact: Boosts primary market liquidity and democratizes access to India’s fast-growing IPO ecosystem. 3️⃣ Risk Weight Reforms: Credit Flow to the Real Economy RBI has lowered risk weights for MSME, real estate, and corporate exposures, and eased the burden on microfinance and NBFC loans. ➡️ Example: A ₹100 crore NBFC loan now needs less capital provisioning, allowing banks to lend more. 💡 Impact: Frees up capital, strengthens microfinance, and supports rural and SME lending. 4️⃣ Lending for Acquisitions & Big Projects Banks can now finance M&A and large infrastructure deals, areas earlier dominated by NBFCs. ➡️ Example: A tech firm can now secure structured debt from banks for expansion. 💡 Impact: Promotes competition, reduces borrowing costs, and repositions banks in high-value corporate finance. 5️⃣ Expanding Collateral Options RBI has lifted the ceiling on loans against listed debt instruments — including bonds, REITs, and InvITs. 💡 Impact: Broader collateral base, deeper bond market participation, and improved liquidity for institutional investors. 6️⃣ Co-Lending Strengthened Banks and NBFCs must now retain at least 10% of every co-lent loan, ensuring shared accountability. 💡 Impact: Strengthens governance, aligns incentives, and builds long-term trust in the co-lending model. 7️⃣ Transition to Expected Credit Loss (ECL) Framework From April 2027, India moves to a forward-looking Expected Credit Loss model. 💡 Impact: Encourages proactive risk management and transparency, aligning Indian lenders with global standards.

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The recent notification from Reserve Bank of India (RBI) is timely and most welcome - Raising the limit on individuals to raise loans by pledging shares as collateral is extremely positive, not only will it help with the growth of LAS (Loan Against Shares), but it will will give a viable option for folks who own shares to borrow against, as opposed to taking personal loans at punitively high interest rates - The removal of regulatory cap on lending against listed debt securities is a massive shot of adrenaline to the burgeoning bonds and listed NCD's market in India; this should help spur growth and make it more attractive as an asset class to retail investors - However, I am not so sure of enhanced limits for IPO Financing. IPO's tend to be frothy and retail investors tend to get the short end of the stick, this move, while very good for the IPO markets, I suspect, will make it a lot more speculative for retail investors #bonds #LAS #fintech Flourish Ventures Harsh Gupta Shivam Satija https://lnkd.in/e7YrcsfB

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India’s boldest startups deserve long-term capital that stays the course. 360 ONE Asset’s ₹500 Cr early-stage VC strategy has been launched, with 4 deals closed across diverse sectors. A core part of our ‘Idea to IPO’ capital stack. Read Abhishek Nag, Senior Fund Manager & Strategy Head, Early-Stage VC, 360 ONE Asset’s interview in Mint here: https://lnkd.in/diBcy86N 360 ONE

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