HDFC Property Fund, HDFC Capital Advisors Pay ₹26.01 Lakh To Settle SEBI Case over Delayed Winding-up of Real Estate Schemes

Moneylife Digital Team 18 June 2026

Investor Interest

HDFC Property Fund and HDFC Capital Advisors Ltd have paid ₹26.01 lakh to settle proceedings initiated by the market regulator Securities and Exchange Board of India (SEBI) over delays in winding up two real estate venture capital fund schemes

The settlement pertains to alleged violations of Regulation 24(2) of the SEBI (Venture Capital Funds) Regulations, 1996, which requires venture capital funds to complete the winding-up process within the prescribed timeline. The applicants filed suo motu settlement applications under the SEBI (Settlement Proceedings) Regulations, 2018, seeking to resolve the matter without admitting or denying the findings.

According to SEBI, HDFC Property Fund had launched two schemes, HDFC India Real Estate Fund (HIREF) and HDFC IT Corridor Fund (HITCF), with an initial tenure of seven years and provisions for extension by two one-year periods.

The market regulator noted that HIREF's extended tenure ended on 17 June 2014. However, the fund completed the liquidation of assets and distribution of proceeds only on 31 March 2021, resulting in a nearly seven-year delay. In addition, the ₹5.33 crore retained for contingent liabilities was distributed to investors only on 25 March 2025.

In the case of HITCF, the extended tenure expired on 28 June 2014. While the fund completed the liquidation process earlier, it retained a residual amount of ₹0.89 crore for contingent liabilities, which was also distributed to investors only on 25 March 2025.

SEBI observed that the delays in winding up the schemes amounted to non-compliance with the VCF Regulations. It also noted that HDFC Capital Advisors assumed the role of investment manager of the fund only from 2 May 2023 as part of an internal restructuring within the HDFC group ahead of the merger of HDFC Ltd with HDFC Bank.

During the settlement proceedings, HDFC Capital Advisors submitted that it had no role in the operations or decision-making related to the schemes during the period in which the delays occurred. The company also informed SEBI that the entire retained amounts had been distributed to investors in March 2025, resulting in a nil balance in the bank accounts of both schemes.

This is the second settlement involving HDFC group-managed investment funds in recent years. In July 2025, SEBI settled proceedings against HDFC Capital Advisors Alternative Investment Fund Category II (AIF-II) after the fund paid ₹36 lakh to resolve allegations of violating alternative investment fund regulations.

In that case, the regulator found that the fund had exceeded the permissible investment concentration limits in a single portfolio company. While the earlier matter related to breaches of AIF investment norms, the present case concerns delays in winding up venture capital fund schemes and distributing investor proceeds

SEBI's internal committee (IC) recommended a settlement amount of ₹26.01 lakh, payable jointly and severally by both the applicants. The proposal was subsequently approved by the SEBI high-powered advisory committee (HPAC) and the panel of whole-time members (WTMs).

After receiving confirmation of payment of the settlement amount, SEBI passed a settlement order, bringing the matter to a close. The regulator clarified that the order does not prevent it from taking appropriate action in the future if any representations made during the settlement process are found to be untrue or if the settlement conditions are breached.

You can also read:

HDFC Capital Advisors, AIF-II Pays Rs36 Lakh To Settle AIF Rule Violation Case

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