SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 8th September, 2025
SECURITIES AND EXCHANGE BOARD OF INDIA (ALTERNATIVE INVESTMENT FUNDS) (SECOND AMENDMENT) REGULATIONS, 2025
No. SEBI/LAD-NRO/GN/2025/265.—In exercise of the powers conferred by sub-section (1) of Section 30 read with sub-section (1) of Section 11, clause (ba) and clause (c) of sub-section (2) of Section 11 and sub-section (1) and (1B) of Section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, namely, – [1] [2] [3]
1. These Regulations may be called the Securities and Exchange Board of India (Alternative Investment Funds)
(Second Amendment) Regulations, 2025.
2. They shall come into force on the date of their publication in the Official Gazette:
3. In the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, –
I. In sub-regulation (1) of regulation 2,
i) clause (fa) shall be substituted with the following, namely, –
“(fa) “Co-investment” means investment made by a Manager or Sponsor or investor of a
Category I or II Alternative Investment Fund in unlisted securities of investee companies
where such a Category I or Category II Alternative Investment Fund makes investment;”
ii) after clause (fa), the following clause shall be inserted, namely, –
“(fb) “Co-investment scheme” means a scheme of a Category I or Category II Alternative
Investment Fund, which facilitates co-investment to investors of a particular scheme of an Alternative Investment Fund, in unlisted securities of an investee company where the scheme of the Alternative Investment Fund is making investment or has invested;”
(iii) after clause (r), the following clause shall be inserted, namely, –
“(ra) “Shelf placement memorandum” means a placement memorandum filed by an Alternative Investment Fund for launching co-investment schemes;”
(iv) in clause (z), the words and symbols “an angel fund as defined under Chapter III-A and” shall be substituted with the word “a”.
II. In regulation 3, in sub-regulation (4), in clause (a), after the words and symbols “SME Funds,”, the words and symbols “angel funds,” shall be inserted.
III. In sub-regulation (1) of regulation 15, clause (b) shall be omitted.
IV. After regulation 17 and before regulation 18, the following regulation shall be inserted, namely, –
“Conditions for co-investment by Category I and II Alternative Investment Funds.”
17A. (1) Co-investment by investors of Category I or Category II Alternative Investment Fund shall be through a co-investment scheme launched under these regulations or through a Co-investment Portfolio Manager as specified under the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020.
(2) A shelf placement memorandum shall be filed with the Board, in the manner as may be specified by the Board from time to time, through a merchant banker along with the fee as specified in Second Schedule to these regulations, prior to the co-investment opportunity being offered to the investors of Category I or Category II Alternative Investment Fund, through co-investment scheme.
(3) A separate co-investment scheme shall be launched for each co-investment, in accordance with the shelf placement memorandum filed with the Board:
Provided that an Angel fund shall not launch a co-investment scheme.
(4) Only accredited investors of the Category I or Category II Alternative Investment Fund shall be eligible to invest in a co-investment scheme.
(5) Each co-investment scheme shall invest in only one investee company.
(6) A co-investment scheme shall not invest in units of Alternative Investment Funds.
(7) Co-investment through a co-investment scheme shall be carried out in the manner and subject to the conditions as may be specified by the Board from time to time.
(8) The terms of co-investment in an investee company by a Manager or Sponsor or Coinvestor or a co-investment scheme, shall not be more favourable than the terms of investment of the Alternative Investment Fund:
Provided that the timing of exit from the co-investment in an investee company shall be identical to the exit of the scheme of the Alternative Investment Fund from the investment in the investee company. [4]
(9) The requirements under clauses (b) and (d) of regulation 10, sub-regulation (2) of regulation 11, sub-regulations (2), (3), (4) and (5) of regulation 12, regulation 13, clauses (a), (c), (da), (g) and (h) of sub-regulation (1) of regulation 15, regulation 16 and regulation 17 shall not apply to a co-investment scheme of an Alternative Investment Fund.”
V. In regulation 19 A,
i) in sub-regulation (1),
(a) the words and symbols “Venture Capital Fund under” shall be omitted;
(b) the words “angel investors” shall be substituted with words “accredited investors”;
ii) sub-regulation (2) shall be substituted with the following, namely, –
“(2) “angel investor” means an accredited investor, or key management personnel of an angel fund or its manager, who invests in an angel fund.”
(iii) sub-regulation (3) shall be substituted with the following, namely, –
“(3) “related party” shall have the same meaning as assigned to it under clause (zb) of subregulation (1) of regulation 2 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.”
VI. In regulation 19B,
i) in sub-regulation (1), the words and symbols “schemes launched by such angel funds.” shall be substituted with “their managers, sponsors, angel investors and investments of angel funds:”.
ii) in sub-regulation (1), the following proviso shall be inserted, namely –
“Provided that the provisions of the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2025 shall apply to angel funds registered prior to the notification of the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2025, in the manner as may be specified by the Board.”
iii) in sub-regulation (2),
(a) after the words and symbols “regulation 14, clauses (a), (c)”, the words and symbols “,(da)” shall be inserted;
(b) the words and symbols “clause (b) of sub-regulation (1) of regulation 16” shall be substituted with “clause (a) of sub-regulation (1) of regulation 16”;
(c) after the words and symbols “sub-regulation (2) of regulation 16,”, the words and symbols “regulation 17, regulation 18,” shall be inserted.
VII. after sub-regulation (2), the following Explanation shall be inserted, namely, –
“Explanation: For the purpose of this sub-regulation, the provisions which are applicable to a scheme of an alternative investment fund, shall be applicable to the angel fund at the fund level, unless specifically stated otherwise.”
VII. In regulation 19C, sub-regulation (2) shall be omitted.
VIII. In regulation 19D,
i) sub-regulation (1) shall be substituted with the following, namely, –
“(1) Angel funds shall raise funds only from accredited investors by way of issue of units, in the manner as may be specified by the Board from time to time:
Provided that the key management personnel of an angel fund or its manager may invest in the angel fund.”
ii) sub-regulation (2) shall be substituted with the following, namely, –
“(2) No minimum value of investment shall be applicable for investment in an angel fund by an angel investor.”
iii) sub-regulation (3) shall be omitted and the existing sub-regulation (4) shall be re-numbered as sub-regulation (3).
iv) after sub-regulation (3) so re-numbered, the following new sub-regulations shall be inserted, namely, –
“(4) Such placement memorandum shall be filed with the Board in the specified format through a merchant banker while filing the application for registration as an angel fund.
(5) The Board may communicate its comments, if any, to the merchant banker and the merchant banker shall ensure that the comments are incorporated in the placement memorandum prior to its circulation to angel investors by the angel fund for soliciting funds.
(6) An angel fund shall on-board at least five accredited investors before declaring its first close in the manner as may be specified by the Board from time to time.
(7) If the angel fund fails to declare the first close of the fund in the specified manner, it shall be required to refile the placement memorandum with the Board for circulation and soliciting funds from angel investors, by paying the requisite fee under the Second Schedule.”.
IX. Regulation 19E shall be substituted with the following, namely, –
“19E. An angel fund shall not launch any schemes for soliciting funds from angel investors or making any investments.”.
X. In regulation 19F,
i) sub-regulation (1) shall be substituted with the following, namely, –
“(1) Angel funds shall invest only in startups, which are not promoted or sponsored by or related to a corporate group whose group turnover exceeds three hundred crore rupees:
Provided that angel funds may make additional investments in their existing investee companies, which are no longer start-ups, subject to the conditions as may be specified by the Board from time to time.
Explanation I: For the purpose of this clause, “corporate group” shall include a group of body corporates with the same promoter(s)/promoter group, a parent company and its subsidiaries, a group of body corporates in which the same person/ group of persons exercise control, and a group of body corporates consisting of associates/ subsidiaries/ holding companies.
Explanation II: For the purpose of this clause, “group turnover” shall mean combined total revenue of the corporate group.”
ii) sub-regulation (2) shall be substituted with the following, namely, –
“(2) Investment made by an angel fund in any investee company shall not be less than ten lakh rupees and shall not exceed twenty five crores rupees.”
iii) sub-regulation (3) shall be substituted with the following, namely, –
“(3) Investment by an angel fund in an investee company shall be subject to lock-in period as may be specified by the Board.”
iv) sub-regulation (5) shall be substituted with the following, namely, –
“(5) Each investment of an angel fund in an investee company shall have contribution from at least two accredited investors.”
v) sub-regulation (6) shall be re-numbered as sub-regulation (7) and before sub-regulation (7) so re-numbered, the following sub-regulation shall be inserted, namely, –
“(6) Angel funds shall not accept contribution for investment in an investee company, from those angel investors who are a related party to such investee company.”.
XI. In regulation 19G,
i) sub-regulation (1) shall be omitted and the existing sub-regulation (2) and (3) shall be renumbered as sub-regulation (1) and (2).
ii) in the re-numbered sub-regulation (1),
a) after the words “continuing interest in” and before the words “the angel fund”, the words “each investment of’ shall be inserted;
b) the words and symbols “two and half percent of the corpus or fifty thousand rupees, whichever is lesser,” shall be substituted with “half percent of the amount invested or fifty thousand rupees, whichever is higher,”.
iii) the re-numbered sub-regulation (2) shall be substituted with the following namely, –
“(2) The manager shall accept contribution from an angel investor for investing in an investee company only after obtaining approval from the angel investor for such investment.”
iv) after sub-regulation (2) so re-numbered, the following new sub-regulations shall be inserted, namely, –
“(3) The manager shall disclose and offer each investment opportunity to all the angel investors of the angel fund.
(4) The manager shall disclose a defined methodology in the placement memorandum of the angel fund, for the purpose of allocating the investment among angel investors who provide approval for such investment, in the manner as may be specified by the Board from time to time.
(5) The manager shall accept contributions for investment in an investee company from the angel investors who provide approval for the investment, in accordance with the methodology disclosed in the placement memorandum of the angel fund.
(6) The investors of an angel fund shall have rights in an investment of the angel fund and in the distribution of proceeds of the investment, pro-rata to their contribution to such investment, except in the cases as may be specified by the Board from time to time.
(7) In case an angel fund offers an opportunity for investment in an existing investee company or related party of an existing investee company, the same shall be disclosed to the angel investors at the time of seeking their approval for making such investment.”.
XII. In regulation 20, sub-regulation (15) shall be substituted with the following, namely, –
“(15) The Manager shall not provide advisory services to any investor other than the investors of a co-investment scheme or clients of a Co-investment Portfolio Manager as specified in the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020, for investment in securities of investee companies where the Alternative Investment Fund managed by it makes investment.”
XIII. In the First Schedule, in Form A, in clause 1, in sub-clause (e), after the words and symbol “1. Category I Alternative Investment Fund- Venture Capital Fund”, the words and symbols “1A. Category I Alternative Investment Fund- Angel Fund” shall be inserted.
XIV. In the Second Schedule,
i) the words and symbols “sub-regulation (5) of regulation 3, sub-regulation (2) of regulation 6 and sub-regulation (2) of regulation 12” shall be substituted with “sub-regulation (5) of regulation 3, sub-regulation (2) of regulation 6, sub-regulation (2) of regulation 12 and subregulation (2) of regulation 17A”.
ii) in Part A,
a) after the words “Scheme Fee for Alternative Investment Funds”, the words “other than Angel Funds” shall be omitted;
b) after the words and symbols “Scheme Fee for Alternative Investment Funds – ?1,00,000”, the words and symbols “Fee for filing shelf placement memorandum for launching Co-investment schemes – ?1,00,000” shall be inserted.
ii) after the words and symbols “Registration Fee for Angel Funds – INR 2,00,000”, the words and symbols “Fee for refiling placement memorandum of Angel Fund under regulation 19D(7) of these regulations- INR 1,00,000” shall be inserted.
AMIT PRADHAN, Executive Director
[ADVT.-III/4/Exty ./3 50/2025-26]
Footnote:
(1) The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were published in the Gazette of India on May 21, 2012 vide No. SEBI/LAD-NRO/GN/2012-13/04/11262.
(2) The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were subsequently amended on, –
(a) 16th September, 2013 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2013-14/24/6573.
(b) 23rd May, 2014 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014 vide No. LAD-NRO/GN/2014-15/03/1089.
(c) 26th September, 2014 by the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 vide No. LAD-NRO/GN/2014-15/11/1576.
(d) 14th August, 2015 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2015 vide No. SEBI/LAD-NRO/GN/2015-16/011.
(e) 4th January, 2017 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2016 vide No. SEBI/LAD/NRO/GN/2016-17/026.
(f) 6th March, 2017 by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 vide No. SEBI/LAD/NRO/GN/2016-17/037.
(g) 1st June, 2018 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2018 vide No. SEBI/LAD/NRO/GN/2018/19.
(h) 10th May, 2019 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2019 vide No. SEBI/LAD/NRO/GN/2019/16.
(i) 17th April, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/10.
(j) 19th October, 2020 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2020 vide No. SEBI/LAD/NRO/GN/2020/37.
(k) 8th January, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2021 vide No. SEBI/LAD/NRO/GN/2021/01.
(l) 5th May, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/21.
(m) 3rd August, 2021 by the (Regulatory Sandbox) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/30.
(n) 3rd August, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/33.
(o) 13th August, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment) Regulations, 2021 vide No. SEBI.LAD-NRO/GN/2021/41.
(p) 9th November, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/57.
(q) 24th January, 2022 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/68.
(r) 16th March, 2022 by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/75.
(s) 25th July, 2022 by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/89.
(t) 15th November 2022, by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/105.
(u) 9th January 2023, by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/113.
(v) 18th January 2023, by the Securities and Exchange Board of India (Change in Control in Intermediaries) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/115.
(w) 7th February 2023, by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/121.
(x) 15th June 2023, by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/132.
(y) 3rd July 2023, by the Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/137.
(z) 17th August 2023, by the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/146.
(aa) 5th January 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/163.
(bb) 25th April 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/168.
(cc) 18th July, 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/194.
(dd) 6th August, 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/198.
(ee) 18th November, 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/209.
(ff) 10th February, 2025, by the Securities and Exchange Board of India (Investor Charter) (Amendment) Regulations, 2025 vide No. SEBI/LAD-NRO/GN/2025/228.
(gg) 23rd May, 2025, by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2025 vide No. SEBI/LAD-NRO/GN/2025/248.
[1] These Regulations may be called the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2025.
[2] They shall come into force on the date of their publication in the Official Gazette:
[3] In the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, –
(1) In sub-regulation (1) of regulation 2,
(2) clause (fa) shall be substituted with the following, namely, –
“(fa) “Co-investment” means investment made by a Manager or Sponsor or investor of a Category I or II Alternative Investment Fund in unlisted securities of investee companies where such a Category I or Category II Alternative Investment Fund makes investment;”
(1) after clause (fa), the following clause shall be inserted, namely, –
“(fb) “Co-investment scheme” means a scheme of a Category I or Category II Alternative Investment Fund, which facilitates co-investment to investors of a particular scheme of an
[4] The co-investment scheme shall be wound up on exit from the co-investment in terms of these regulations.
