Sebi May Revisit AIF Rules After Ire Over Investor Parity Norms

Before the rule change, private funds had more leeway to tailor rights for different investors

- Neha Joshi

The Securities and Exchange Board of India (Sebi) is reviewing a set of new rules for alternative investment funds (AIFs) following growing concerns from fund managers, legal advisors and investors, at least five people aware of the development told Mint on the condition of anonymity.

The rules, which came into effect in December 2024, were designed to ensure equal treatment of investors, but many in the industry say they are too inflexible and may disrupt existing fund structures and global investor participation, experts said.

AIFs—private pools of capital that invest in startups, real estate, and unlisted companies—have become a major vehicle for capital formation in India. As of 31 March 2025, AIFs had invested ₹5.38 trillion, according to Sebi data. Of this, real estate accounted for ₹69,896 crore, IT services for ₹34,553 crore and non-banking financial companies (NBFCs) for ₹25,564 crore.