Private equity
Growth or buyout capital for unlisted businesses. Mandates may focus on consumer, technology or later-stage companies.
What to review: Valuation, concentration and exit routes
Private markets · Category II
Category II AIF in India
Explore private equity, private credit and real estate opportunities. Compare strategies, liquidity and risks before committing to a Category II AIF.
What Is a Category II AIF?
One regulatory category. Different private market strategies.
A Category II AIF is a SEBI-regulated, pooled investment vehicle outside Categories I and III. It can include private equity, debt and real estate funds.
- Mandate
- Each scheme defines its eligible assets, investment horizon and exit terms in its fund documents.
- Leverage
- Routine leverage is restricted; SEBI permits limited temporary funding under its rules.
- Investor risk
- Returns and capital are not guaranteed. Risk depends on the assets, mandate and manager.
Category II AIF Investment Strategies
Private credit
Investment in debt securities or other permitted credit instruments, with outcomes linked to payments and recoveries.
What to review: Issuer quality, security and repayment
Real estate
Funding or participation in development projects, including residential real estate where the scheme mandate permits.
What to review: Approvals, construction, sales and exits
Fund of Funds (FoF)
Invests in units of other AIFs according to its mandate, providing exposure through underlying fund managers.
What to review: Underlying funds, layered fees and liquidity
Explore Category II AIF Funds
Category
AIF Category II
Browse selected private equity, private credit and other Category II schemes, then explore each fund in detail.
360 ONE Consumer Opportunities Fund360 ONE Early-Stage Fund - Series 1360 ONE Multi-Stage AI FundBharat Tech FundChanakya Opportunities Fund IIGodrej Performing Credit FundGreat Value Capital - GVC SSF IICICI Prudential Corporate Credit Opportunities FundICICI Prudential Real Estate Development FundICICI Prudential Special Opportunities FundIIFL Late-Stage Private Equity FundIndusbridge Ventures FundNeo Infra Income Opportunities Fund IINippon India Credit Opportunities AIF Scheme 2Nippon India Digital Innovation (NIDI) Fund 2APhysis CapitalSixth Sense India Opportunities IVSundaram Alternates Emerging Corporate Credit Opportunities Fund - Series IIThe Neo Prime FundValueQuest Tristar Fund
These funds are examples, not a ranking or recommendation. Classification and subscription availability are subject to the latest official scheme documents.
Category II Private Equity
What Is Private Equity?
Private equity provides capital to privately held businesses in exchange for an ownership stake. Returns depend on company growth, valuation and a successful exit; they are not guaranteed.
Category II private equity AIFs can pursue growth capital, buyouts or sector-focused investments, depending on the scheme's mandate. Investors should assess how the manager selects companies, supports them and plans to realise value.
How Equity Funds Work
The manager pools investor commitments, invests in selected businesses and monitors them until an exit opportunity arises. Distributions may take years.
Investment Scope
A scheme may focus on a company stage, sector or deal type. The PPM sets out eligible investments, portfolio limits and decision-making rules.
Potential Portfolio Role
Private equity can provide exposure to unlisted business growth, but its valuations and cash flows differ from listed equities.
Key Risks to Consider
Company underperformance, concentration, uncertain valuations, dilution and delayed or unsuccessful exits can reduce returns or cause capital loss.
Fund Directory
Top Private Equity Strategies
Chanakya Opportunities Fund IIPre-IPO and growth investingBharat Tech FundDeep-techIIFL Late-Stage Private Equity FundLate-stage private equity360 ONE Multi-Stage AI FundAI-focused investingNippon India Digital Innovation (NIDI) Fund 2AGrowth-stage technology
Important information: Private equity investments are illiquid and exposed to business, valuation and exit risks. Capital and returns are not guaranteed. Review each scheme's latest Private Placement Memorandum and official documents for its classification, mandate, terms and availability.
CATEGORY II PRIVATE CREDIT
What Is Private Credit?
Private credit AIFs may finance businesses and projects by investing in debt securities and other permitted credit instruments. Investors may receive income from these investments, subject to credit and liquidity risks.
Private credit funds in India are generally structured as Category II Alternative Investment Funds. Depending on their mandate, these funds may invest in debt securities, structured credit, asset-backed or infrastructure-linked instruments, or special-situation opportunities permitted by their fund documents.
How Credit Funds Work
Credit funds evaluate borrowers, cash flows, repayment capacity, collateral and transaction structure before deploying capital. Outcomes generally depend on interest payments, contractual cash flows and repayment of principal.
Investment Scope
Credit-oriented Category II AIFs may invest in debt or structured credit opportunities based on each scheme's mandate, risk framework and official fund documents.
Potential Portfolio Role
Credit funds may provide exposure to income-oriented private-market opportunities and can help diversify a portfolio beyond traditional listed equity and fixed-income investments.
Key Risks to Consider
Credit AIFs carry borrower default, delayed repayment, limited liquidity, concentration, interest-rate and recovery risks. Risk profiles can differ significantly across funds and transactions.
Fund Directory
Explore Credit & Income Strategies
Godrej Performing Credit FundPerforming mid-market creditICICI Prudential Corporate Credit Opportunities FundCorporate creditNippon India Credit Opportunities AIF Scheme 2Performing creditSundaram Alternates Emerging Corporate Credit Opportunities Fund - Series IICorporate creditNeo Infra Income Opportunities Fund IIInfrastructure incomeThe Neo Prime FundMulti-asset private marketsGreat Value Capital - GVC SSF Idistressed assets
Disclaimer: Private Credit AIF investments are subject to market, credit and liquidity risks. Returns and repayment of capital are not guaranteed. Investors should review the applicable Private Placement Memorandum and other official fund documents before making an investment decision.
Private Equity vs Private Credit AIFs
| Factor | Private equity | Private credit |
|---|---|---|
| Main exposure | Ownership in businesses | Debt securities or structured credit instruments |
| Return source | Growth and eventual sale | Interest, fees and principal repayment |
| Main risks | Business performance, valuation and exit | Borrower default, recovery and security |
| Cash flow | Distributions typically follow investment exits | Quarterly and periodic, subject to collections |
How to Evaluate Category II AIF Funds
Choosing a Category II AIF fund starts with your investment objectives, risk capacity and time horizon. Compare schemes on a consistent basis:
- Mandate: eligible assets, sectors, stage, geography and exclusions.
- Portfolio construction: concentration, deal size and diversification.
- Manager: relevant track record and realised exits or recoveries.
- Economics: management fee, expenses, carry and distribution waterfall.
- Risk controls: underwriting, security, valuation and conflicts.
- Exit approach: expected routes, tenure, extensions and downside plan.
Eligibility, Investment Horizon and Liquidity
The general minimum investment under SEBI's AIF framework is ₹1 crore per investor, subject to specified exceptions; individual schemes may set higher commitments. Category II AIFs are close-ended with a minimum three-year tenure, and many private-market strategies run longer. Capital calls can span the investment period. HNI investors should size the commitment against their illiquid allocation. NRI investors must also check scheme eligibility, KYC, tax and applicable cross-border rules. There is generally no on-demand redemption; even a permitted transfer may have few buyers.
Risks of Category II AIF Investments
Private equity
Company failure, dilution, uncertain valuation and delayed exit.
Private credit
Default, delayed payments, weak collateral and slow recovery.
Real estate
Approvals, construction, sales and project execution delays.
Across strategies
Concentration, illiquidity, fees, valuation uncertainty and capital loss.
A SEBI registration or a limitation on routine leverage does not protect investors from loss.
Frequently Asked Questions
Discuss Category II AIF options
Tell us your investment horizon and preferred strategy. We can help you compare available fund documents and suitability considerations.
Enquire about AIFsSources and important information
SEBI references: AIF Regulations (October 2026) and AIF Master Circular (June 2026). Check the latest PPM and manager documents for each fund's registration, terms and risks. Educational only; not investment advice. Capital is at risk; past returns do not guarantee future results.