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Capital Call

May 2023

Highlights		Advocacy		IVCA In News		PE/VC Deal Tracker		New Members	Get In Touch

Highlights

With over 70 delegates from the VC ecosystem, the maiden session of #VC101 in Mumbai was an absolute triumph. Industry stalwarts Rahul Khanna, Ruchi Khajanchi, Manish Kheterpal, Lavanya Ashok, Gaurav Ahuja, Himanshu Mandavia, Tejesh Chitlangi, Leelavathi Naidu and Sushreet Pattanayak graced us with their expertise as speakers and mentors. Their insights into fund management were truly invaluable! From fund structuring case studies to enriching discussions, #VC101 Mumbai was a treasure trove of knowledge-sharing and growth.
A special shout-out goes to our esteemed Knowledge Partners, PwC and IC Universal Legal, Advocates & Solicitors, for their unwavering support. Together, we're shaping the future of venture capital! Mark your calendars and get ready for the next #VC101 session in Bengaluru! We can't wait to see the VC community come together once again for another unforgettable learning experience! Let's continue this journey of growth and collaboration! Here’s a glimpse into the session:

The May edition of the LinkedIn Live session - #WhatsNext: Unveiling Best VC Industry Practices - Insights for Founders, Private Equity and Venture Capitalists" brought together industry experts to discuss a range of topics related to private equity and venture capital practices in India. From the evolution of mentorship and angel investment to what investors and VCs look for in a cap-table, attendees can expect to gain valuable insights into best practices and learn how to avoid pitfalls when seeking funding or investment opportunities.

	May’s Fund in Focus featured, Mohanjit Jolly, Partner at Iron Pillar. In this column he shared the venture fund’s vision to back high value start-ups who are “building from India for the world”, the close of its $129Mn cloud fund, top investment trends and the fund’s bullish approach towards investing in enterprise centric sectors in 2023. To read the interview, click here.

Advocacy

SEBI conducted its 27th meeting of the Alternative Investment Policy Advisory Committee (AIPAC) on May 10, 2023. The meeting covered a range of important agenda items aimed at enhancing the regulatory framework for alternative investment funds (AIFs).

On 15th May 2023, SEBI conducted an Accredited Investors Meeting to discuss the simplification of the accredited investor registration process. IVCA made representations to SEBI after the discussion.

A meeting was organized with Revenue Secretary, MOF, to address various issues, including the recognition of additional returns under the GST Law and the characterization of capital gains from the sale of units of AIF by investors.

To recap on the ongoing critical issue of Angel Tax, IVCA has been actively working on representations and engaging with government stakeholders to advocate for exclusions and appropriate valuation methodologies. A notification from the CBDT was issued on May 24, 2023. This notification considered some of the recommendations put forth by IVCA.

This month IVCA submitted a revised representation on Section 56(2)(viib) and Rule 11UA to the Hon’ble Finance Minister, Revenue Secretary, Secretary, Joint Secretary of the Department of Economic Affairs, Chairman, Joint Secretary CBDT, DPIIT, TPRU.

Following the AIPAC meeting, SEBI released consultation papers. IVCA compiled inputs from its members and submitted comments on the consultation paper regarding the proposed amendment to SEBI (Alternative Investment Funds) Regulations, 2012, with the aim of strengthening the governance mechanisms of Alternative Investment Funds (AIFs).

A follow-up representation was submitted to SEBI on two separate occasions. The first one addressed co-investments via the Portfolio Management Services (PMS) route, with submissions made in December '21 and July '22. The second representation focused specifically on Angel Funds, and the submission was made in September '21.

IVCA provided recommendations on the SEBI Circular outlining the modalities for the implementation of the framework for Accredited Investors (AI), which was dated August 26, 2021.

A note on opportunities for India, considering the US regional banking crisis, was submitted to Chairman Parliamentary Standing Committee, with reference to the meeting held on April 3, 2023.

IVCA submitted a note explaining the reasons why corporates choose the Delaware Incorporation structure to the DEA.

A representation was submitted to DPIIT regarding SIDBI's FFS commitment to funds with a corpus greater than INR 1000 crore.

A representation was submitted to the Revenue Secretary, addressing issues such as the recognition of additional returns under the GST Law and the characterization of capital gains from the sale of units of AIF by investors.

A representation was submitted to Finance Secretary, discussing issues such as the recognition of additional returns under the GST law, capital gains characterization, and Large Value Funds.

A representation was submitted to Secretary DEA, covering topics such as the recognition of additional returns under the GST law, capital gains characterization, and Large Value Funds.

Click here to view the complete list of advocacy submissions made by IVCA.

IVCA In News

	This month’s coverage included stories following the the notification issued by CBDT, an interesting TV panel discussion on Indian startups who have easy access to capital but lack accountability and other industry trend stories on valuation and the role domestic capital can play for the success of fund managers in India. Some of the top stories of the month are –

	Following IVCA’s active engagement with various stakeholders, CBDT in May proposed new rules, by which provisions were made for diverse valuation methodologies, safe harbour clauses and exemptions for more entities. For these stories commentaries from the members were shared including - Karthik Redd, Siddarth Pai and Ruchi Khajanchi. Read some stories here: The Economic Times, Business Standard , The Times of India
	CNBC TV-18 organised a special program on their weekly show – Young Turks. The program hosted by Shereen Bhan discussed the adverse effect of easy access to funds have led to the rise of cases among Indian startups of non-accountability. IVCA members – Vineet Rai of Avishkaar Capital and Anirudh Damani of Artha Venture Fund alongwith Alok Mittal of Indifi participated in the discussion. To watch this program, click here.
	In an interesting industry feature by Deal Street Asia ,Rajat Tandon of IVCA shared his perspective on how the availability of domestic capital could make fundraising process for India-focused PEs and VCs a lot easier as an after effect of macro headwinds prompting global LPs to be cautious. Read full article here.
	In an industry piece by Business Standard tracing the recent slashing of valuations of Indian unicorns and decacorns. Rajeev Suri of Orios Venture Partners shared his insights on the current trend, citing that the startups which can show pathway to profitability and cashflow are better positioned to face the correction in the market. To read the full article, click here.

Industry Insights

Raising a private equity climate impact fund

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APAC private debt managers search for distressed debt opportunities

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Biotech venture capitalists tap into Asia’s booming beauty industry

Click here to view

PE/VC Deal Tracker

Click here to view report

Upcoming Events

#VC101 Module 2, Bangalore	15th June 2023

#What’sNext: The Role of Domestic Capital in the success of Indian Fund Managers	21st June 2023

Regulatory Webinar	29th June 2023

New Members

Introducing the new members joining our dynamic network.

View All Members

To join IVCA's dynamic network, write to:

aakriti@ivca.in

gayathri@ivca.in

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