SEBI Releases Borrowing Guidelines for Category I & II AIFs

23 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.

Technology

10 Sep 2025

LTIMindtree renews digital transformation pact with OKQ8

LTIMindtree has renewed its strategic partnership with OKQ8, one of the largest fuel companies in the Nordic region. The collaboration underscores the IT services firm’s role as a trusted partner in driving digital transformation.The extended engagement will focus on modernising OKQ8’s technology landscape across cloud and infrastructure management, application development and maintenance, and enterprise platforms such as CRM and ERP powered by Microsoft Dynamics. LTIMindtree will also integrate AI-driven processes to improve efficiency, customer experience and sustainability outcomes.Clas..

BHEL shares up 3% on 10-year hydrogen fuel cell pact

Bharat Heavy Electricals (BHEL) shares rose over 3% recently after the company signed a 10-year exclusive memorandum of understanding (MoU) with Singapore-based Horizon Fuel Cell Technologies. The partnership marks BHEL’s entry into the hydrogen fuel cell market.Under the agreement, both companies will jointly develop hydrogen fuel cell-powered rolling stock and collaborate on business sharing and operations. The move is expected to strengthen BHEL’s presence in clean energy and sustainable transport.Earlier this month, BHEL also signed a License Agreement for Transfer of Technology (LAToT..

Interio by Godrej Unveils Strategy to Double Revenue in 3 Years

Interio by Godrej, a leading furniture brand from the Godrej Enterprises Group, has unveiled its refreshed brand identity as a one-stop destination for modern Indian living across homes and workspaces. The repositioning is anchored on design-led innovation, an enhanced omnichannel experience, and a future-ready product portfolio. Nyrika Holkar, Executive Director, Godrej Enterprises Group, said: “Our aim is to make great design accessible. As industry leaders, we are uniquely placed to deliver on this promise with our end-to-end solutions from design and manufacturing to retail and serv..