SEBI extends NISM certification deadline

Following continuous engagement and submissions by IVCA with NISM and SEBI, SEBI through its circular dated May 13, 2025, has extended the deadline for compliance with the NISM certification requirement for the key investment team of AIF managers to July 31, 2025.
SEBI extends deadline for legacy VCFs to apply for migration under the MVCF framework
SEBI, through its circular dated August 19, 2024, introduced a one-time option for legacy Venture Capital Funds (VCFs) to migrate to the AIF regime under the newly created MVCF sub-category. The deadline for submitting applications has now been extended to July 19, 2025.

Regulatory Consultations:

1. IVCA has been actively engaging with the RBI on the issue of investment restrictions imposed on regulated entities (REs) with respect to AIFs. Recently, the RBI released a consultation paper, which includes the following:
   • Individual REs may invest up to 10% of an AIF scheme’s corpus, subject to an aggregate cap of 15% for all REs.
   • Investments of up to 5% by an individual RE will not attract any restrictions.
   • Strategically significant AIFs may be exempted from these limits, following consultation with the Government.
   • A consolidated response is currently being prepared based on inputs from members and will be submitted shortly.
2. SEBI has released a Co-Investment Vehicle (CIV) consultative paper. IVCA has long advocated for this structure and recently submitted its recommendations to SEBI based on member feedback. The key submission includes:
   
   • Allowing greater flexibility in the CIV structure, permitting all AIF investors (not just accredited ones), enabling a single CIV for multiple co-investment opportunities, and allowing investments in both listed and unlisted securities.

1. SEBI:
   Key Discussions at the Meeting with the SEBI Chairperson:
   • Ease of Doing Business: SEBI is considering revamping the existing AIF regulations, with a proposed shift in focus from registering the fund to registering the manager. IVCA is in the process of submitting detailed comments on the revised regulations.
   • Inter-regulatory Coordination: SEBI to initiate discussions with other key regulators—RBI, IRDAI, and PFRDA to advocate for the AIF industry and facilitate greater access to domestic pools of capital.
2. Common Compliance Examination: The proposal for a unified compliance exam applicable across all investment vehicles was discussed, with the aim of streamlining regulatory requirements and reducing duplication.
3. Private Credit Framework: The need for a distinct regulatory framework tailored to Credit AIFs was emphasized. Key issues discussed included: Tranching, Accelerated investor accreditation mechanisms, Interval funds and Capital call facilities.
4. AIPAC:
   Key discussions focused on enhancing the regulatory environment for AIFs. The following points were discussed:
   
   • Allowing AIFs to offer co-investment opportunities within the AIF structure itself under the SEBI (AIF) Regulations, 2012 investments.
   • Expanding the definition of Qualified Institutional Buyers (QIBs) under SEBI (ICDR) Regulations, 2018 to include Accredited Investors for Angel Fund investments
   • Enabling reporting of AIF unit values to depositories for better transparency and granting flexibility to AIFs in situations involving scheme wind-up or surrender of registration
5. Transition of VCFs to AIF Framework: Discussions were held on the transition process for Venture Capital Funds (VCFs) into the AIF framework, based on SEBI’s August 2024 circular. Focused on: Timelines and regulatory requirements; Operational challenges faced by existing VCFs; Ensuring a smooth migration with minimal disruption to investors and fund operations; Seeking regulatory support for necessary extensions and transitional relief.
6. MCA:
   Key points were raised during the discussion:
   
   • Seeking exemption from public disclosure and repetitive filings for partner admission and exit.
   • Requesting a confidentiality carve-out for LLP documents in the case of AIFs set up as LLPs.
   • Enabling the conversion of existing AIFs structured as trusts into LLPs.
7. DEA called a meeting to understand and discuss the consultation paper on Co- Investments.
8. Ministry of AYUSH & Ministry of Commerce and Industry
   Key industry stakeholders came together for a focused consultation chaired by Shri Piyush Goyal, Hon’ble Minister of Commerce and Industry. IVCA shared insights on two key areas to unlock the full potential of the Ayush sector:
   
   • The need for a dedicated Fund of Funds to catalyse investments across the Ayush ecosystem.
   • Strengthening support for Ayush-focused startups through improved manufacturing incentives, export facilitation, and ease of doing business measures.
   The Hon'ble Commerce and Industry Minister provided perspective on strengthening the talent pipeline for the sector.

IVCA intensifies industry outreach on SEBI’s migration scheme for legacy Venture Capital Funds (VCFs). As reported by VCCircle, SEBI’s migration scheme for legacy VCFs—introduced via circular in August 2024—has seen limited uptake, prompting IVCA to step up efforts to drive awareness and compliance. IVCA has issued targeted advisories and public calls urging all VCFs operating under the repealed SEBI (Venture Capital Funds) Regulations, 1996, to evaluate eligibility and apply for migration before the July 19, 2025 deadline. In parallel, IVCA is coordinating with stakeholders to ensure smooth facilitation while continuing engagement with SEBI to address any operational concerns. Read the article here.

RBI’s proposed relaxation in AIF investment norms marks a significant step forward for capital formation. In a recent proposal covered by Business Standard, RBI has suggested easing restrictions on investments by regulated entities (REs) into AIFs. IVCA has actively engaged with RBI on this front, welcoming the move while continuing to represent industry views on achieving a balanced framework that enables responsible growth. Read the article here.

Defence-tech and drone startups gain investor traction amid shifting geopolitical landscape. An article in The New Indian Express reports growing VC interest in India’s defence- tech and drone ecosystem following recent geopolitical events. IVCA has consistently supported greater private capital participation in strategic sectors and sees this as a critical frontier for innovation and national resilience. Read the full story here.

India’s green mobility transition faces fresh headwinds in the EV cab sector. As covered in Outlook Business, challenges around unit economics and operational hurdles are slowing momentum in the EV cab space. IVCA continues to engage with investors and policymakers on building sustainable pathways for India’s green mobility transition. The article can be read here.

Following the launch of the India VC Report 2025, by IVCA and Bain & Co, IVCA organised for a panel discussion with CNBC TV-18. The panel saw participation from Padmanabh Sinha (Paddy), Managing Partner & Co-Founder, LaunchBay Capital and Aditya Shukla, Partner, Bain & Co, hosted by Ritu Singh. Given India’s startup investment rebound captured in the report, the discussion touched upon the key trends such as the IPO boom, AI-led innovation, and renewed investor confidence. The report findings and panel insights underscore the resilience and evolution of India’s startup ecosystem. Watch the full segment here.

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