Key Takeaways
- • SEBI proposes GARUDA (Green-Channel: AIF Rollout Upon Document Acknowledgement) mechanism to reduce AIF scheme launch timelines from 30 days to 10 working days, effective immediately upon PPM filing through a merchant banker.
- • For first-time schemes, AIFs may launch from the date of registration or after 10 working days of application filing, whichever is later, streamlining initial capital deployment.
- • Accredited Investor-only (AI-only) schemes and Angel Funds exempted from merchant banker filing requirement; fund managers may file PPMs directly with SEBI accompanied by CEO and compliance officer undertakings.
- • AIF industry demonstrates significant growth: registered AIFs increased to 1,849 (March 31, 2026) from 732 five years prior; cumulative commitments reached Rs 15.74 lakh crore with net investments of Rs 6.45 lakh crore as of December 31, 2025.
- • Initiative designed to enhance ease of doing business, accelerate capital efficiency, and support India's expanding alternative investment sector amid rising scheme filing volumes.
Summary
India's Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing GARUDA—Green-Channel: AIF Rollout Upon Document Acknowledgement—a streamlined regulatory mechanism intended to expedite the launch of alternative investment fund (AIF) schemes. The proposal marks a significant procedural reform, reducing the mandatory waiting period for scheme launches from 30 calendar days to 10 working days following placement memorandum (PPM) filing, contingent on the absence of regulatory objections.
Under the GARUDA framework, regular AIF schemes gain approval to launch within 10 working days of PPM submission to SEBI via a merchant banker. For inaugural schemes launched by an AIF, the timeline extends to either the date of the fund's registration or 10 working days from application filing, whichever occurs later. This bifurcated approach balances expedited deployment for established managers while protecting investor safeguards for new entrants.
A notable component of the proposal eliminates the merchant banker intermediation requirement for specialized fund categories. Accredited Investor-only (AI-only) schemes and Angel Funds may now have PPMs filed directly by fund managers with SEBI, provided they submit accompanying undertakings from their chief executive officer and compliance officer. This administrative relief targets segments with concentrated, sophisticated investor bases and aims to reduce unnecessary friction in fundraising processes.
The proposal arrives against the backdrop of substantial industry expansion. The AIF sector has grown considerably: registered AIF count reached 1,849 as of March 31, 2026, compared to 732 five years earlier—a 153% increase. Cumulative capital commitments to AIFs stood at Rs 15.74 lakh crore, with net investments deployed totaling Rs 6.45 lakh crore as of December 31, 2025. SEBI has characterized GARUDA as essential infrastructure to support this growth trajectory, citing improved ease of doing business and enhanced capital deployment efficiency as primary objectives for the initiative.
Under the GARUDA framework, regular AIF schemes gain approval to launch within 10 working days of PPM submission to SEBI via a merchant banker. For inaugural schemes launched by an AIF, the timeline extends to either the date of the fund's registration or 10 working days from application filing, whichever occurs later. This bifurcated approach balances expedited deployment for established managers while protecting investor safeguards for new entrants.
A notable component of the proposal eliminates the merchant banker intermediation requirement for specialized fund categories. Accredited Investor-only (AI-only) schemes and Angel Funds may now have PPMs filed directly by fund managers with SEBI, provided they submit accompanying undertakings from their chief executive officer and compliance officer. This administrative relief targets segments with concentrated, sophisticated investor bases and aims to reduce unnecessary friction in fundraising processes.
The proposal arrives against the backdrop of substantial industry expansion. The AIF sector has grown considerably: registered AIF count reached 1,849 as of March 31, 2026, compared to 732 five years earlier—a 153% increase. Cumulative capital commitments to AIFs stood at Rs 15.74 lakh crore, with net investments deployed totaling Rs 6.45 lakh crore as of December 31, 2025. SEBI has characterized GARUDA as essential infrastructure to support this growth trajectory, citing improved ease of doing business and enhanced capital deployment efficiency as primary objectives for the initiative.
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