SEBI Eases Access: LVF Investment Threshold Slashed to ₹25 Crore.

SEBI Eases Access: LVF Investment Threshold Slashed to ₹25 Crore

Bridging the Gap between Institutions and Opportunities

In a bold move announced on August 9, 2025, SEBI has proposed to significantly lower the minimum investment threshold for Large Value Funds (LVFs) from ₹70 crore to ₹25 crore. The objective? Broaden the investor base, attract a wider pool of domestic institutional players—such as insurance companies—and make these sophisticated investment vehicles more accessible.

More Than Just a Number: Regulatory Reliefs to Accompany

But it doesn’t stop at threshold adjustments. SEBI’s consultation paper outlines a suite of proposed relaxations to streamline operations for LVFs:

• No longer mandatory to follow the standard template for Private Placement Memoranda (PPMs)

• Annual PPM audits and investment committee approvals could be waived

• NISM certification for key investment team members may be waived for LVF-only schemes

• Removal of the 1,000‑investor cap for these schemes, citing the high‑value ticket size and accredited investor profile. 

Why It Matters: Democratizing Alternative Investments

These reforms can potentially reshape the AIF landscape:

• Lower thresholds make LVFs viable for insurers and specialized institutional players previously constrained by high entry levels.

• Regulatory ease may reduce compliance burdens, enabling quicker fund launches and smoother fund management.

• A broader base could foster better diversification and enhance competition. 

What to Watch Next: Consultation Outcomes

SEBI’s proposals are still in the consultation phase, and its final decision remains to be seen. Key aspects to follow:

• Modifications based on public feedback—especially around investor safety and disclosure norms

• Implementation timelines for both threshold reduction and relief measures

• Impact assessment regarding fund inflows, investor participation, and market dynamics. 

TL;DR Snapshot:

Feature	Current Position	Proposed Change
Minimum Investment Threshold	₹70 crore	₹25 crore
PPM Template/Audit Requirements	Mandatory	Proposed exemptions
NISM Certification	Required	May be waived
Investor Cap (per scheme)	1,000 investors	Proposed removal

SEBI’s initiative signals a strategic shift towards promoting inclusive, efficient, and investor-friendly alternative investment frameworks. As the consultation papers elicit feedback, the investment community is watching closely—for what could be a new chapter in India’s AIF ecosystem.