Will Sebi’s accredited investor push work?

The alternative investment industry is divided on whether the Securities and Exchange Board of India's (Sebi) latest rules will expand India's base of accredited investors, a cohort of sophisticated investors that has the financial capacity and understanding to invest in high-risk instruments.

- Apoorva Ajith

Registration for accredited investors remains modest, according to Sebi's September board meeting documents. While India has more than 72,000 unique alternative investment fund (AIF) investors, the number of accredited investors (AIs) is "below 1,000", the documents show. The count was 649 in Sebi's June meet documents.

The regulator attributed the low count of such accredited investors (Als) to recent relaxations and the existence of "deemed Als," whose participation does not appear in accreditation data. However, industry executives said demand for such products is still lacklustre.

"Accredited investors are not offered a lot in India," said Ranjit Jha, managing director and chief executive officer of Rurash Financials, an asset management company. "Because India is yet to become a developed economy. Hence, we lack ... exclusive investment opportunity in India for accredited investors."