Dive into the world of Core Investment Companies (CICs) with our detailed guide. Understand what CICs are, their regulatory framework, and their pivotal role in India’s financial sector. Explore investment opportunities beyond traditional boundaries.

2. Demystifying Core Investment Companies: Your Comprehensive Guide to CICs in India
Investing in India’s financial sector opens doors to unique opportunities, especially when delving into the
realm of core investment companies (CICs). These entities hold a special place in the Indian financial
landscape, primarily focusing on investments in shares, debentures, bonds, loans, or advances to group
companies. Let’s dive into understanding what CICs are, their regulatory framework, and their significance
in India’s economy.
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3. Understanding Core Investment Companies
A Core Investment Company is a non-banking financial company (NBFC) that specializes in
managing assets and investments in shares to hold stakes in group companies. Unlike typical
NBFCs, they aren’t engaged in trading or other commercial activities, except through their
subsidiaries. According to the Reserve Bank of India (RBI), a CIC should have at least 90% of its total
assets in the form of investments in equity shares, preference shares, debt, or loans in group
companies. Moreover, its investments in equity shares in group companies should constitute at
least 60% of its total assets.
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4. Navigating the Regulatory Maze
Core Investment Companies in India fall under the purview of the Reserve Bank of India.
The RBI classifies CICs based on their size and the nature of their activities, ensuring
they maintain adequate capital and mitigate excessive risk-taking, given their exposure
to market fluctuations.
Diverse Types of CICs
CICs-ND-SI (Non-Deposit taking-Systemically Important) are those with asset sizes of
₹500 crore and above, mandatorily requiring registration with the RBI due to their
potential systemic impact. On the other hand, smaller CICs, with assets below ₹500
crore, aren’t required to register but must adhere to prudent guidelines.

5. Capital Requirements and Regulatory Compliance
CICs-ND-SI are mandated to maintain a minimum Capital Adequacy Ratio (CAR) of 30% of
their risk-weighted assets, with restrictions on investments and loans to manage exposure to
certain risks. For instance, they cannot invest more than 10% of their owned funds in the
equity shares of any single group company, including subsidiaries.
Expanding Horizons: The Case of Fx Lotus
While not traditionally categorized as Core Investment Companies, platforms like Fx Lotus
broaden the investment landscape, particularly in forex markets. Although their primary
focus is forex investment, they mirror CICs in strategically channeling funds into profitable
avenues, thereby contributing to the overall investment ecosystem in India.

6. Driving Growth and Stability
CICs play a pivotal role in fostering the growth of group companies, acting as financial
powerhouses that provide strategic investments to drive expansion. By investing in
both listed and unlisted securities of their group companies, CICs support these entities
in achieving their long-term business objectives.
Addressing Challenges
CICs encounter challenges such as regulatory compliance, risk concentration, and
market volatility. Staying abreast of regulatory requirements while managing exposure
to group companies and navigating market fluctuations are critical aspects of their
operational landscape.

7. In Conclusion
Core Investment Companies are integral to India’s financial sector, nurturing the growth
of group companies through strategic investments. Recognizing entities like Fx Lotus
underscores the diversity of investment opportunities in India’s dynamic market.
Understanding both traditional and modern investment entities provides a holistic view
of navigating and benefiting from India’s rich financial ecosystem.
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