Chapter III · Investment Conditions and Restrictions
Regulation 10
Investment in Alternative Investment Fund
Chapter III · Investment Conditions and Restrictions
SEBI (Alternative Investment Funds) Regulations, 2012
In plain English
In plain English
Regulation 10 sets the entry rules that apply to every AIF. Each scheme needs a corpus of at least ₹20 crore (₹5 crore for a social impact fund). Each investor must put in at least ₹1 crore, except employees or directors of the AIF or the Manager (₹25 lakh) and accredited investors (no minimum). Since April 2026, an individual can invest ₹1,000 in a social impact fund that invests only in not-for-profit organisations on a social stock exchange. The Manager or Sponsor must keep skin in the game: the lower of 2.5% of corpus or ₹5 crore (5% or ₹10 crore for Category III), invested in the fund and not by waiving management fees, and disclosed to investors. A scheme can have at most 1,000 investors, with accredited investors not counted, and funds can be raised only by private placement, with units in demat form.
What the Master Circular adds
From SEBI's Master Circular for AIFs (updated 16 June 2026). The Regulation sets the rule; the Master Circular sets how it works in practice.
- MC Ch 3
Joint investors: an investor and his or her spouse, parent, son or daughter (not more than two persons) can together meet the minimum investment. For any other joint investors, the minimum applies to each of them.
- MC Ch 3
In an open-ended scheme, the investor's first single lump-sum investment must itself be at least the minimum investment amount.
- MC Ch 11
AIF units must be issued in dematerialised form (Regulation 10(aa)). Transfers of demat units continue to be governed by the PPM, the investor agreements and the other fund documents.
Where this sits
Regulation 10 is in Chapter III — Investment Conditions and Restrictions of the SEBI (Alternative Investment Funds) Regulations, 2012.
Amended in 2026 — see What changed.
Key numbers
Provisos, explanations and conditions
Quoted from the regulation text. These qualify or carve out exceptions to the main rule.
Provided that in case of investors who are employees or directors of the Alternative Investment Fund or employees or directors of the Manager, the minimum value of investment shall be twenty five lakh rupees[:] [Provided further that this clause shall not apply to an accredited investor[:]] [Provided further that in case of a social impact fund which invests only in securities of not for profit organizations registered or listed on a social stock exchange, the minimum value of investment by an individual investor shall be one thousand rupees;]
Provided that for Category III Alternative Investment Fund, the continuing interest shall be not less than five percent of the corpus or ten crore rupees, whichever is lower.
What changed in 2026
Before: …the minimum value of investment by an individual investor shall be two lakh rupees
Now: …the minimum value of investment by an individual investor shall be one thousand rupees
Social impact funds investing only in not-for-profit organisations on a social stock exchange can take individual investments from ₹1,000.
Where it connects
The text of this regulation does not refer to other numbered regulations.
Related Master Circular chapters (by subject)
- Chapter 3 · On-boarding of investors by AIFs
- Chapter 10 · Framework for Accreditation of Investors
- Chapter 11 · Dematerialisation of units and investments of AIFs and collection of stamp duty…
Chapter
Check yourself
20 practice questions on Regulation 10, each with an explanation for every option.
- What is the minimum corpus for each scheme of an AIF (other than a social impact fund)?
- A social impact fund is launching a scheme. What minimum corpus applies?
- What is the minimum investment an AIF may accept from an ordinary investor?
- A director of the AIF's Manager wants to invest in the fund. What is the minimum ticket?
- True or false: the ₹1 crore minimum investment in Regulation 10(c) does not apply to an accredited investor.
The regulation
10. Investment in all categories of Alternative Investment Funds shall be subject to the following conditions:(a) the Alternative Investment Fund may raise funds from any investor whether Indian, foreign or non-resident Indians by way of issue of units[:] [Provided that a social impact fund or schemes of a social impact fund may also issue social units;] [(aa) The Alternative Investment Fund shall issue units in dematerialised form subject to the conditions specified by the Board from time to time.]
(b) each scheme of the Alternative Investment Fund shall have corpus of at least twenty crore rupees[:] [Provided that each scheme of the social impact fund shall have a corpus of at least five crore rupees;]
(c) the Alternative Investment Fund shall not accept from an investor, an investment of value less than one crore rupees:
Provided that in case of investors who are employees or directors of the Alternative Investment Fund or employees or directors of the Manager, the minimum value of investment shall be twenty five lakh rupees[:] [Provided further that this clause shall not apply to an accredited investor[:]] [Provided further that in case of a social impact fund which invests only in securities of not for profit organizations registered or listed on a social stock exchange, the minimum value of investment by an individual investor shall be one thousand rupees;]
(d) the Manager or Sponsor shall have a continuing interest in the Alternative Investment Fund of not less than two and half percent of the corpus or five crore rupees, whichever is lower, in the form of investment in the Alternative Investment Fund and such interest shall not be through the waiver of management fees:
Provided that for Category III Alternative Investment Fund, the continuing interest shall be not less than five percent of the corpus or ten crore rupees, whichever is lower.
(e) the Manager or Sponsor shall disclose their investment in the Alternative Investment Fund to the investors of the Alternative Investment Fund;
(f) no scheme of the Alternative Investment Fund shall have more than one thousand investors[:] [Provided that accredited investors shall be excluded while computing the number of investor in a scheme of an Alternative Investment Fund:] [Provided[further] that the provisions of the[Companies Act, 2013] shall apply to the Alternative Investment Fund, if it is formed as a company.]
(g) the fund shall not solicit or collect funds except by way of private placement.
Highlighted text: SEBI (AIF) (Amendment) Regulations, 2026 (No. 303, notified 16 April 2026).
Text from the consolidated Regulations. Square brackets and [***] mark earlier amendments and omissions, as in the official text. Check the official Gazette text before relying on it.
Last checked against source on 10 October 2026: consolidated Regulations to 19 November 2025, read with Amendment Regulations No. 303 (16 April 2026) and No. 313 (10 July 2026).
Source and verification
- Instrument
- SEBI (Alternative Investment Funds) Regulations, 2012 — Regulation 10
- Text used
- Consolidated Regulations as amended up to 19 November 2025, read with SEBI (AIF) (Amendment) Regulations, 2026 (No. 303, notified 16 April 2026)
- Last checked
- 10 October 2026
- Official source
- www.sebi.gov.in → Legal → Regulations. The Gazette text prevails.
Work with Prashant Kumar
Structuring or running an AIF?
Advice on registration, PPM filing, investor on-boarding and ongoing compliance under the AIF Regulations.