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INDIA BUSINESS WORLD - NOVEMBER 1st – NOVEMBER 15th 2008
NOD FOR FDI IN PRIVATE EQUITY TRUSTS
THE Foreign Investment Promotion Board (FIPB) has ruled that foreign investment can flow into private equity funds registered as trusts, report Rajat Guha& G Ganapathy Subramaniam from New Delhi. The move opens up another window of funds for private equity players and venture capital funds registered as trusts. The department of industrial policy & promotion (Dipp) was opposed to FDI in trusts, but FIPB has overruled the argument. This can lead to a new channel of investment for India Inc, especially start-ups. The FIPB's view is that FDI can be permitted in trusts that intend to carry out PE investments, provided they register themselves as VC funds. Dipp is now planning to introduce guidelines for allowing FDI in trusts that invest in companies.
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