Investment Policy

Investment Policy

  1. Eligible Projects

    The investment objective of the Fund is to generate superior and consistent risk-adjusted returns for its investors by investing in securities of high quality micro, small and medium enterprises in India with best-in-class products or services, scalable business model and a proven track record. IT/ITES, healthcare, food processing, logistics and education are the focus areas for the Fund. RVCF aims to arm the Portfolio Companies and their promoters with necessary support to build and scale up their businesses and transform them in to successful business ventures.
  2. Investment Criteria

    The Fund is looking for projects offering potential for an attractive growth and earnings. Some of the parameters critical for project selection are:

    Management:
    A strong and committed management team with a demonstrated track record and integrity.

    Market:
    High growth potential in the market, which the investee company seeks to serve the market will need to be quantifiably large with growth opportunities especially in emerging areas that address global markets.

    Competitiveness:
    The investee company should possess the ability to develop and retain a long term competitive advantage through the use of technology.

    Return On Investment:
    There should be a logical and visible exit mechanism available for investor that provides attractive capital appreciation with above-average profitability.
  3. Investment Instrument

    The Fund invests in the form of equity, Compulsory Convertible Preference Shares(CCCP’s), Optionally Convertible Cumulative Preferential Shares (OCCPS),Direct Equity etc. The exact instrument varies from case to case depending on the risk perception, the requirements of the investee company and the applicable SEBI regulations.
  4. Investment Range

    Instrument Range
    The Fund undertakes individual investment in the preferred range of Rs. 50 million to 150 million. Normally investment in equity is restricted to 40% of the total paid up capital of the company. However, Seed stage investments with lower investment ticket size would be considered.

    Investment Horizon
    The Funds investment horizon varies from 3 to 7 years with the option for a quicker exit incase the situation so warrants.
  5. Disinvestment

    The preferred exit route is through a listing on the stock exchange within 3 to 5 years, or as may be stipulated, from the date of investment.

    In case a public listing is not feasible due to the reasons of size of the investment or other circumstances, the alternative method of exit consists of a sale to strategic investor, buy-outs and buyback of share by the company and promoters on the basis of a pre-determined formula and independent valuation of shares as on the date of buyback.