Business

AIFs seek status quo as ‘foreign control’ rules go for a recast

Published

2 hours ago

7 September 2026

AIFs seek status quo as 'foreign control' rules go for a recast

Mumbai: Indian private equity and venture capital funds have forewarned the government and financial regulators that changing the definition of ‘foreign control’ for these local funds could significantly hurt capital inflow.

Commonly called alternative investment funds (AIFs), these local fund houses, which have emerged as significant sources of risk capital, made a strong appeal at a meeting about a fortnight ago with senior officials of the Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI) and ministry of finance, two persons familiar with the discussions told ET.

At stake is the future of the fast-growing AIF industry which has been pooling in money for over a decade from local and offshore investors to bankroll unlisted firms, startups and expanding businesses.

Their concern and the urgent plea requesting a status quo on regulations, stems from the draft FEMA (Foreign Investment) Rules 2026. The draft, released by RBI on July 21, 2026, gives regulators the scope to change the parameters that qualify an AIF as ‘foreign controlled’. Currently, an AIF with almost all offshore investors is regarded as a domestic entity if its sponsor and investment manager are Indian owned and controlled.
As SEBI and RBI had expressed before, such a rule opens the door to regulatory arbitrage: a foreign investor barred from ownership or control in sensitive industries puts money in an AIF (backed by Indian sponsor and manager) to indirectly acquire equity stake in companies operating in sectors having foreign direct investment (FDI) restrictions.

After the draft July guidelines, AIFs fear that a relook at the ‘foreign ownership and control’ definition to curb such indirect ownership would mean that even AIFs with Indian managers and sponsors would be considered as foreign entities if majority of the fund corpus is contributed by foreign investors. Once categorised as foreign entities, such AIFs would run into investment restrictions and formalities applicable to foreign direct investors.
With non-residents accounting for 40% of AIF investments, the draft rules have rattled the industry, as ET had reported on August 11.”At the meeting, the AIF lobby tried to put across the point that the India story can be best sold by Indian managers. They are best positioned to canvass for capital from various markets — a strategy that has worked in the last 10 years. The industry said that if the government intends to liberalise foreign investments, such a change could slow down inflows,” said a person who attended the meeting.

In fact, AIFs have even asked for a carve out in the existing regulation so that funds whose sponsors and managers are owned and controlled by listed Indian financial institutions should be treated as domestic AIFs even if more than 50% equity of these institutions is with foreign persons. “Private banks and NBFCs are regulated and registered with RBI. As long as they are listed, AIFs backed by them should be considered domestic. AIFs have asked for simplification of rules related to ultimate beneficial ownership,” said a source.

The regulatory and ministry officials neither raised the issue of regulatory arbitrage nor reacted to the points made by AIF industry officials whose views on the draft norms were sought. The concerns over regulatory arbitrage was first captured in a note placed before SEBI board in May 2024. Besides AIFs’ ‘indirect ownership from downstream investment’, it said, “..there is scope that the investments could flow from our land border sharing countries through AIFs in companies beyond the permissible limit for automatic route under FDI policy, undermining the spirit of Press Note 3 notification and the steps taken by Government of India in this regard.”

Business

Hang Seng trapped in 24,950-26,200 range: Hourly levels

Published

4 minutes ago

7 September 2026

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Hang Seng trapped in 24,950-26,200 range: Hourly levels

Business

Can Prasol Chemicals IPO deliver long-term growth for high-risk investors?

Published

11 minutes ago

7 September 2026

NewsAdmin

Can Prasol Chemicals IPO deliver long-term growth for high-risk investors?

ET Intelligence Group: Prasol Chemicals, a specialty chemicals company, plans to raise ₹80 crore through a fresh issue towards repayment of debt. It will also raise ₹420 crore through an offer for sale. The promoter group’s stake will fall to 77.5% after the IPO from 89.2%. The company operates two manufacturing facilities in Maharashtra. While it manufactures over 150 specialty chemicals, over 40% revenue is contributed by a single product category. It exports to 69 countries and derives over a quarter of revenue from international markets. Top 10 customers accounted for 23.7% of revenue while top 10 suppliers account for nearly 69% of raw material purchases. The capacity utilisation at Mahad plant improved to 44.1% in FY26 from 12.7% in FY24 but remained relatively low. Given these factors, investors with high-risk appetite may apply.

Can Prasol Chemicals IPO deliver long-term growth for high-risk investors? <br>

Business
Incorporated in 1992, Prasol Chemicals is focused on manufacturing acetone-based and phosphorus-based derivatives, catering to diverse end-use industries such as performance chemicals (including lubricant additives and mining chemicals), pharmaceuticals, agrochemicals, paints, inks, construction & adhesives (PICA), and home and personal care. Its product portfolio includes 21 acetone-based chemicals, 53 phosphorous-based chemicals, and 76 other specialty chemicals. In FY26, acetone-based specialty chemicals contributed 42.8% of revenue, phosphorus-based specialty chemicals 38.3%, and other specialty chemicals 18.3%.

Financials

Revenue from operations grew 18.6% annually to ₹1,232.6 crore and net profit surged 114.1% annually to ₹83.1 crore between FY24 and FY26. Operating profit before interest, tax, depreciation and amortization (EBITDA) jumped 51.7% to ₹139.3 crore during the same period. EBITDA margin improved to 11.3% in FY26 from 6.9% in FY24. Cash flow from operations dropped to ₹49.5 crore in FY26 from ₹115.6 crore in FY24, largely due to working-capital swings, rising receivables and inventory as the company scaled up operations and expanded sales. Working capital days increased to 49 days in FY26 from 35 days in FY24.

Valuation

Officials say at least five people are dead and five others injured after an Amazon cargo plane overran the runway, struck multiple vehicles and caught fire at Miami International Airport.

Amazon said it is cooperating with authorities after a cargo plane operating on behalf of Amazon Air crashed while attempting to land at Miami International Airport on Sunday, killing at least five people and injuring five others.

The company confirmed to FOX Business that the aircraft involved in the crash was operated by cargo carrier 21 Air, which flies for Amazon Air.

Amazon Air is Amazon’s air cargo network, helping move packages between the company’s facilities, according to its website.

“We’re heartbroken to learn that five people lost their lives in today’s incident at Miami International Airport. Our deepest sympathies go out to the families, loved ones, and all those affected by this devastating loss,” an Amazon spokesperson said.

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An Amazon cargo plane is seen after it crashed at Miami International Airport on September 6, 2026, in Miami, Florida. (Joe Raedle/Getty Images)

“The airplane, which was operated by 21 Air, was attempting to land when this incident occurred. We’re working closely with local authorities and officials to learn more and will cooperate fully with any investigation,” the spokesperson added.

Prime Air Flight 7598 — a Boeing 767-300 operated by 21 Air — overran the runway while attempting to land at Miami International Airport around 2 p.m. local time after departing San Juan, Puerto Rico, according to authorities.

Miami-Dade officials said the aircraft struck multiple vehicles and caught fire.

At least five people were killed, and five others were injured. Three victims were transported to a trauma center in critical condition, while two others were taken to a local hospital, authorities said.

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The airplane tail of a cargo plane that says Amazon

Prime Air Flight 7598 overran the runway while attempting to land at Miami International Airport around 2 p.m. local time after departing San Juan, Puerto Rico. (CHANDAN KHANNA / AFP via Getty Images)

The Federal Aviation Administration (FAA) and National Transportation Safety Board (NTSB) are investigating the crash.

Boeing told Fox News that the aircraft was first delivered as a passenger plane in 1994 before later being converted to a freighter.

“Boeing extends our deepest condolences to the families and loved ones of those who lost their lives in the accident in Miami,” the company said.

“Our hearts go out to those injured and affected by this tragedy. Boeing is supporting the investigation led by the U.S. National Transportation Safety Board.”

It was not immediately clear whether the crash would affect Amazon Air operations or package deliveries.

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