SEBI Releases Borrowing Guidelines for Category I & II AIFs

21 Aug 2024 CW Team

The Securities and Exchange Board of India (SEBI) has introduced detailed guidelines for borrowing by Category I and II Alternative Investment Funds (AIFs). These guidelines aim to enhance the management and operational efficiency of AIFs while safeguarding investors' interests.

Under the new regulations, Category I and II AIFs can borrow only to meet temporary funding requirements, including meeting their day-to-day operational needs or to bridge capital calls. SEBI has capped such borrowings at 10% of the investable funds. The borrowing should be repaid within 30 days from the date of borrowing, ensuring that the leverage does not become a permanent feature of the fund?s operations.

Furthermore, SEBI emphasised that borrowings should not be used to meet redemptions or distributions to investors. Instead, they are to be used exclusively for short-term liquidity mismatches or emergencies. AIFs are also required to maintain a credit rating from a registered rating agency if they intend to borrow, ensuring transparency and accountability in their borrowing practices.

SEBI's move comes in response to growing concerns about the leverage levels within AIFs and aims to prevent any systemic risks arising from excessive borrowing. By implementing these measures, SEBI seeks to maintain the financial stability of AIFs and protect the interests of investors.

These new guidelines are expected to bring greater discipline and risk management to the operations of Category I and II AIFs, reinforcing SEBI?s commitment to a robust regulatory framework in the investment sector.

Infrastructure Transport

01 Sep 2025

Indian Railways Marks New Milestone with 4.5 km Long ‘Rudrastra’ Trial

Indian Railways has successfully conducted the trial run of Asia’s longest freight train, named ‘Rudrastra’, achieving a new milestone in cargo transportation, as per news reports. The 4.5 km-long train began its trial from Ganjkhwaja railway station in Chandauli, Uttar Pradesh, and travelled to Garhwa in Jharkhand. Covering a distance of 209 km in 5 hours and 10 minutes, it maintained an average speed of 40.5 km per hour. The train was formed by combining three long-haul racks, with ..

UltraTech Launches India’s First On-Site Hybrid RTC Renewable Energy Project

UltraTech Cement has operationalised a 7.5 MW round-the-clock (RTC) hybrid renewable energy project at its Sewagram Cement Works in Gujarat. The first-of-its-kind solution combines bifacial solar modules with trackers, wind energy and battery storage, co-located on-site, to ensure uninterrupted power for cement manufacturing without grid reliance. The project was executed in collaboration with clean energy solutions provider Gentari. Installed as a behind-the-meter system, it is the country..

Patna Metro Trials Successful, Red Line Priority Corridor to Launch This Month

Patna is set to roll out its first metro rail service later this month, with successful trial runs conducted on the Red Line priority corridor, the Patna Metro Rail Corporation announced.On 7 September, a metro train completed a test run between the Patna depot and Bhootnath station. Officials said the trials involved rigorous checks of rolling stock fitness, overhead electrification (OHE), and track alignment and stability to ensure operational safety and performance.The corridor from the New Pataliputra Bus Terminal to Bhoothnath has been designated as the priority stretch and will be the fi..