India’s market regulator Securities and Exchange Board of India (SEBI) has proposed a new green-channel mechanism called GARUDA to help Alternative Investment Funds (AIFs) launch schemes faster and improve capital deployment.
GARUDA, short for Green-Channel: AIF Rollout Upon Document Acknowledgement, aims to simplify and speed up the processing of Placement Memorandums (PPMs) submitted to SEBI.
Under the proposal, regular AIF schemes would be allowed to launch within 10 working days of filing their PPMs through a merchant banker, unless SEBI raises objections. Currently, AIFs are required to wait 30 days after filing before launching schemes.
For the first scheme of an AIF, SEBI said the launch would be allowed either from the date of registration approval or after 10 working days from filing the application, whichever is later.
The regulator said the proposal is intended to support faster and more efficient capital deployment as the AIF industry continues to grow rapidly.
According to SEBI, the number of registered AIFs increased from 732 to 1,849 in the last 5 years as of March 31, 2026. The regulator also noted that cumulative commitments raised by AIFs reached ₹15.74 lakh crore, while net investments stood at ₹6.45 lakh crore as of December 31, 2025.
SEBI has also proposed easing rules for Accredited Investor-only schemes and Angel Funds. These entities may no longer need to file PPMs through merchant bankers. Instead, fund managers could directly submit documents to SEBI along with declarations from the chief executive officer and compliance officer.
Such schemes would also be allowed to launch immediately after filing their PPMs without waiting for a review period.
The regulator stated that accredited investors are financially sophisticated individuals who meet specific income or net-worth criteria and are capable of understanding complex investment risks independently.
The number of accredited investors rose sharply to 2,773 as of April 30, 2026, compared to 649 a year earlier. As of December 31, 2025, accredited investors held AIF units worth nearly ₹1.91 lakh crore, accounting for around 30% of total AIF investments.
SEBI added that it will continue conducting post-facto scrutiny of scheme documents on a risk-based sample approach. Any irregularities or disclosure failures may lead to regulatory action.
The regulator has invited public comments on the proposal till June 1.
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