Guidelines on raising money through Private Placement by NBFCs
The Reserve Bank of India (RBI) has issued guidelines on private placement by NBFCs. The details are as follows:-
- The offer document for private placement should be issued within a maximum period of 6 months from the date of the Board Resolution authorizing the issue.
- The offer document may be printed or typed "For Private Circulation Only".
- An NBFC shall only issue debentures for deployment of funds on its own balance sheet and not to facilitate resource requests of group entities/ parent company / associates.
- Private placement by all NBFCs shall be restricted to not more than 49 investors, identified upfront by the NBFC.
- The minimum subscription amount for a single investor shall be Rs 25 lakh and in multiples of Rs10 lakh thereafter.
- There should be a minimum time gap of at least six months between two private placements.
- An NBFC shall not extend loans against the security of its own debentures.