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Sebi proposes changes in IPEV capital valuation guidelines for AIFs

Business Standard  

The Securities and Exchange Board of India (Sebi) plans to apply International Private Equity and Venture Capital Valuation Guidelines (IPEV) for the unlisted securities held by Alternative Investment Funds (AIFs).Last year, the AIF industry body Indian Venture and Alternate Capital Association (IVCA) endorsed IPEV guidelines for the valuation of the unlisted companies in their schemes and portfolio. As AIFs invest in startups and early-stage companies, the change was needed to address valuation gaps.Sebi has also proposed to allow an additional month to AIFs to provide audited data on cash flows and the valuation of their scheme-wise investments and portfolio companies. As per current guidelines, they were required to provide the data to performance benchmarking agencies within six months of the end of the financial year.Sebi has also suggested removing other requirements like the classification of change in methodology as a material change for the scheme.