The India International Financial Services Centres Authority has issued a framework permitting Venture Capital Schemes and Restricted Schemes under the IFSCA Fund Management Regulations, 2025, to create multiple unit classes with different distribution rights. Following consultation on the proposed regime, the framework enables junior or subordinate investors to accept lower returns or disproportionately higher losses, supporting blended finance and other structures that combine concessional or philanthropic funding with commercial capital. ESG Schemes aligned with one or more United Nations Sustainable Development Goals may also accept grants, provided grant funding does not constitute most of the scheme’s corpus and applicable laws are met. Minimum investment in junior or subordinate units is USD 1 million for Accredited Investors and USD 2 million for other investors. Schemes must provide enhanced disclosures covering unit rights and risks, distribution waterfalls, conversion terms and grant policies, while net asset value must be calculated separately for each unit class by an independent valuer.
2026-09-25India International Financial Services Centres Authority
India International Financial Services Centres Authority issues differential distribution framework for blended finance fund structures
The India International Financial Services Centres Authority has allowed Venture Capital Schemes and Restricted Schemes to issue unit classes with different distribution rights, facilitating blended finance and other fund structures. Junior or subordinate units carry minimum investments of USD 1 million for Accredited Investors and USD 2 million for others, with enhanced disclosure and independent valuation requirements. Eligible ESG Schemes may also accept grants that do not form most of their corpus.