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Mumbai: The Alternative Investment Funds (AIF) industry in India has scaled a major milestone, with commitments crossing the ₹14 lakh crore mark for the first time as of June 2025, according to the latest data released by the Securities and Exchange Board of India (SEBI).
Commitments from investors — which reflect the total capital pledged to AIFs — stood at ₹14.18 lakh crore in June 2025. This represents an impressive 20% year-on-year growth compared to June 2024, underlining the rising significance of AIFs in India’s financial landscape.
Category-wise Breakdown of Commitments
The growth momentum was visible across all three AIF categories, though the scale and pace varied:
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Category I AIFs: Commitments stood at ₹90,600 crore, up 12.2% year-on-year.
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Category II AIFs: By far the largest segment, commitments reached ₹10.78 lakh crore, growing 15.5% year-on-year.
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Category III AIFs: Commitments rose to ₹2.49 lakh crore, registering 5.7% growth compared to June 2024.
In the March–June 2025 quarter alone, Category I commitments grew by about ₹1,500 crore (1.7%), while Category II saw a much larger jump of ₹48,200 crore (4.7%), and Category III added ₹19,250 crore (8.4%).
Category II AIFs, which typically include private equity and debt funds, continue to dominate in absolute terms, both in commitments and deployed funds.
Funds Raised Across Categories
While total commitments reflect investor pledges, actual funds raised by AIFs stood at ₹5.91 lakh crore in June 2025.
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Category II AIFs accounted for the largest share, raising ₹3.80 lakh crore.
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Category III AIFs raised ₹1.61 lakh crore, ranking second.
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Category I AIFs collected around ₹51,000 crore.
Funds raised from domestic investors also witnessed steady growth, climbing from ₹4.08 lakh crore in March 2025 to ₹4.38 lakh crore in June 2025, marking a 7.2% quarterly increase.
Investments in Listed and Unlisted Securities
The SEBI data indicates a healthy balance of investments between listed and unlisted markets:
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Net investments in listed securities surged by 20%, from ₹1.52 lakh crore in March 2025 to ₹1.83 lakh crore in June 2025.
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Investments in unlisted securities rose 7.6%, from ₹3.27 lakh crore to ₹3.52 lakh crore over the same period.
This demonstrates the growing importance of listed equities in AIF portfolios, even as unlisted equity and debt remain core investment avenues.
Equity vs. Debt Investments
Category II AIFs led the charge in both equity and debt allocations:
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Equity Investments:
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Category II AIFs: ₹1.85 lakh crore
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Category III AIFs: ₹1.45 lakh crore
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Category I AIFs: smaller allocation
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Debt Investments:
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Category II AIFs: ₹1.25 lakh crore
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Category I AIFs: ₹4,700 crore, ranking second
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This reinforces the position of Category II AIFs as the primary vehicle for private capital deployment in India, spanning equity, credit, and hybrid strategies.
Sector-Wise Investment Patterns
AIFs continued to diversify across industries, with total investments in the top 10 sectors climbing from ₹5.38 lakh crore in March 2025 to ₹5.72 lakh crore in June 2025.
Breakdown of sector-wise investments:
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Real Estate – ₹70,925 crore
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IT/ITeS – ₹45,927 crore
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Financial Services – ₹34,211 crore
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NBFCs – ₹29,167 crore
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Banks – ₹24,024 crore
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Pharmaceuticals – ₹22,705 crore
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Health Care Providers & Services – ₹13,832 crore
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Insurance – ₹13,041 crore
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Renewable Energy – ₹11,815 crore
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Others – ₹3,06,599 crore
The real estate sector continues to be the single-largest beneficiary of AIF investments, followed by IT/ITeS and financial services. Notably, renewable energy has also emerged as a growing area of interest, reflecting the shift towards green investments.
Industry Significance
The robust growth of the AIF industry highlights the increasing role of alternative assets in India’s capital markets. With commitments surpassing ₹14 lakh crore, AIFs are becoming an important complement to traditional investment vehicles like mutual funds and insurance.
Industry experts note that rising interest from domestic ultra-high-net-worth individuals (UHNWIs), family offices, pension funds, and global institutional investors has driven this surge.
The regulatory framework by SEBI has also played a key role, ensuring investor protection while enabling flexibility for fund managers to explore innovative strategies.
Looking Ahead
As India’s economy expands and private capital becomes a critical enabler of growth, AIFs are expected to play a pivotal role in financing infrastructure, startups, green energy, and new-age businesses.
With steady inflows, increasing participation in both listed and unlisted markets, and sectoral diversification, the AIF industry is well positioned for continued growth in FY26 and beyond.
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