Chapter III · Investment Conditions and Restrictions
Regulation 17A
1[Conditions for co-investment by Category I and II Alternative Investment Funds
Chapter III · Investment Conditions and Restrictions
SEBI (Alternative Investment Funds) Regulations, 2012
In plain English
In plain English
Investors of a Category I or Category II AIF can co-invest alongside the fund only through a co-investment scheme launched under these regulations, or through a Co-investment Portfolio Manager under the Portfolio Managers Regulations, 2020. Before a co-investment opportunity is offered through a co-investment scheme, a shelf placement memorandum must be filed with SEBI through a merchant banker, with the fee in the Second Schedule.
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 6
A co-investment (CIV) scheme can be offered to accredited investors of the Category I or II AIF. Each CIV scheme has its own bank and demat account, and its assets are ring-fenced.
- MC Ch 6
An investor's co-investment in a company across CIV schemes cannot exceed three times that investor's contribution to the same company through the AIF scheme.
Where this sits
Regulation 17A is in Chapter III — Investment Conditions and Restrictions of the SEBI (Alternative Investment Funds) Regulations, 2012.
Provisos, explanations and conditions
Quoted from the regulation text. These qualify or carve out exceptions to the main rule.
Provided that an Angel fund shall not launch a co-investment scheme.
Provided that the timing of exit from the co-investment in an investee company shall be identical to the exit of the scheme of the Alternative Investment Fund from the investment in the investee company.
What changed
No change to this regulation by the 2026 amendments (No. 303 of 16 April 2026 and No. 313 of 10 July 2026).
Where it connects
Provisions this regulation refers to
Related Master Circular chapters (by subject)
Chapter
Check yourself
3 practice questions on Regulation 17A, each with an explanation for every option.
- Through which route can investors of a Category II AIF co-invest?
- What must be filed with SEBI before a co-investment opportunity is offered through a co-investment scheme?
- What is the cap on an investor's co-investment in a company across CIV schemes?
The regulation
17A. (1) Co-investment by investors of Category I or Category II Alternative Investment Fund shall be through a co-investment scheme launched under these regulations or through a Coinvestment Portfolio Manager as specified under the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020.
(2) A shelf placement memorandum shall be filed with the Board, in the manner as may be specified by the Board from time to time, through a merchant banker along with the fee as specified in Second Schedule to these regulations, prior to the co-investment opportunity being offered to the investors of Category I or Category II Alternative Investment Fund, through coinvestment scheme.
(3) A separate co-investment scheme shall be launched for each co-investment, in accordance with the shelf placement memorandum filed with the Board:
Provided that an Angel fund shall not launch a co-investment scheme.
(4) Only accredited investors of the Category I or Category II Alternative Investment Fund shall be eligible to invest in a co-investment scheme.
(5) Each co-investment scheme shall invest in only one investee company.
(6) A co-investment scheme shall not invest in units of Alternative Investment Funds.
(7) Co-investment through a co-investment scheme shall be carried out in the manner and subject to the conditions as may be specified by the Board from time to time.
(8) The terms of co-investment in an investee company by a Manager or Sponsor or Co-investor or a co-investment scheme, shall not be more favourable than the terms of investment of the Alternative Investment Fund:
Provided that the timing of exit from the co-investment in an investee company shall be identical to the exit of the scheme of the Alternative Investment Fund from the investment in the investee company.
(9) The co-investment scheme shall be wound up on exit from the co-investment in terms of these regulations.
(10) The requirements under clauses (b) and (d) of regulation 10, sub-regulation (2) of regulation 11, sub-regulations (2), (3),
(4) and (5) of regulation 12, regulation 13, clauses (a), (c), (da),
(g) and (h) of sub-regulation (1) of regulation 15, regulation 16 and regulation 17 shall not apply to a co-investment scheme of an Alternative Investment Fund.]
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 17A
- Text used
- Consolidated Regulations as amended up to 19 November 2025, read with the 2026 amendments (no change to this regulation)
- Last checked
- 10 October 2026
- Official source
- www.sebi.gov.in → Legal → Regulations. The Gazette text prevails.
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