Core investment company strategy

NBFC core investment company (CIC) Investor:

The other variants of nbfcs are not permitted to carry out any kind of equity investment. CIC concept was promoted to avoid requirements of RBI compliances by the NBFCs formed for business group investments. Core Investment Companies, (CIC) are those companies which have their assets predominantly as investments in shares for holding stake in group companies but not for trading, and also do not carry on any other financial activity. They hold at least 90% of its net total assets on the balance sheet in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in the group companies. Their investments in the equity shares in group companies and investment trusts is more than 60% of its net assets. They can’t trade their investments except through block deals for dilution. They can undertake an investment in bonds or debentures issued by group companies, loans to group companies and issuing guarantees on behalf of group companies. Here, a group companies means the companies that can exercise at least 26% voting rights or appoint 50% or more directors in each other, directly or indirectly.