| Size of financial assistance | • For VCF-ST as at eligibility criteria for companies applying for assistance up to Rs. 50 lakhs and above Rs. 50 lakhs: Rs.10 lakhs to Rs.5 Crore. Aggregate assistance not more than two times the current net worth of the Company.
• For VCF-ST as at eligibility criteria for technology-oriented innovative projects: Max. of Rs. 10 lakhs per year for a period of three years aggregating Rs. 30 Lakh subject to satisfactory progress/review. A portion of the corpus, maximum up to Rs. 10.00 crores, is to be utilized for this purpose. |
| Tenure of financial assistance | • Up to 10 years including moratorium period in case of debentures and debt. • In case of Equity/Compulsorily Convertible Preference Shares (CCPS)/Optionally Convertible Preference Shares (OCPS), decision for exit would be taken on case-to-case basis with maximum tenure up to 10 years. |
| Nature of Financial Assistance/ Instruments for investment | 1. Compulsorily Convertible Debentures (CCDs), Optionally Convertible Debentures (OCDs), Non- Convertible Debentures (NCDs), etc. 2. Shares including CCPS/OCPS (maximum up to 25% of the corpus) can be invested subject to the following: • Under VCF-ST: 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 applicable laws; • Under technology-oriented innovative projects: The financial assistance shall be provided in the form of Equity/CCPS/OCPS/Debt. |
| Funding Pattern | Investment under the fund will be categorized as follows: • The applicant 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 Government subsidy under various schemes of central or state Government or through any other permissible means of raising funds, including bank loans, subject to the conditions imposed by the Trust and the Bank/Financial Institution concerned; • In cases where any other source of funding is sought/available, the promoters will have to contribute at least 15% of the project cost. ** For Companies with sanctioned assistance of above Rs.5 crore, the money released by the Trust/ Fund Manager would be in proportion to the loan tranche released by Bank/department of Govt of India, except in the cases being supported under Innovative ideas category selected by Technology Business Incubators (TBIs) as mentioned at point A above. In no case would the assistance from the VCF-ST exceed Rs. 5.00 crore and in the case of TBIs, exceed Rs. 30 lakhs (annually not more than Rs. 10 lakhs for a period of 3 years). |
| Moratorium period for redemption of principal | Maximum of 36 months from the date of first disbursement, to be decided on case-to-case basis. |
| Returns/ Coupons/ Interest for financial assistance | a. In Equity investment, return at the time of exit by way of buyback / strategic investment / IPO shall be 4% 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 ST women entrepreneur, the ST women entrepreneur should hold at least 51% of the shareholding in the company and should be the Managing Director of the Company; **In the case of disabled entrepreneurs, guidelines issued by the Department of Divyang Welfare for qualifying as disabled would be followed.] |
| Exit Mechanism | • Exit through payments out of operations, buyback/redemptions by promoters/ companies, strategic investments, listing on stock exchanges or any other exit process. • Exit process shall be determined on case-to-case basis depending on the nature of financial assistance and performance of the company. |
| 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-case basis. c. Pledge of Shares held by promoters and forming at least 26% stake and up to 51% of the Issued and Paid-up capital shall be taken. However, the percentage of pledged shares would be decided on case-to-case basis. d. In addition to the charge on assets, Post-dated Cheques (PDCs)/ Electronic Clearing Service (ECS) and promissory notes shall be taken. e. Personal guarantees of the promoters along with buyback agreement shall be entered. f. In case no mortgage in the form of project land is available, the borrower may arrange collateral securities. g. Securities envisaged may not be in violation of any State/Central/local laws etc. For investment under any other scheme, pledge of shares held by the ST Promoter(s) in the Company shall be taken. |
| Utilization of Funds | Sanctioned / committed funds and expenses to be considered as utilization of funds. |