What is the rule?
An AIF shall not accept from an investor an investment of value less than one crore rupees.
Two carve-outs sit in the same provision. Employees and directors of the AIF or its manager may invest ₹25 lakh. And the clause does not apply to accredited investors at all, so they have no floor.
Is ₹1 crore payable upfront?
Usually not, and this catches people out.
In most closed-ended funds you sign a commitment. The manager then draws the money down in tranches over several years as deals are found. You may pay 20% in year one and nothing for eighteen months.
Plan for the calls rather than the headline. Failing to meet one can carry punitive consequences under the fund documents, sometimes including forfeiting part of what you have already put in.
Open-ended Category III funds are more likely to take the whole amount at once.
What else has a minimum?
A few other thresholds sit alongside it and are worth knowing.
- Scheme corpus: at least ₹20 crore before a scheme can operate, ₹5 crore for a social impact fund
- Investor cap: 1,000 investors per scheme, with accredited investors excluded from the count
- Manager skin in the game: at least 2.5% of the corpus or ₹5 crore, whichever is lower. For Category III it is 5% or ₹10 crore
Are angel funds still ₹25 lakh?
No. That figure is out of date and still repeated everywhere.
Since September 2025, angel funds raise only from accredited investors, and no minimum investment applies to them at all. The old ₹25 lakh angel minimum was removed.
How does it compare?
Minimums are the fastest way to see where a structure sits.
- AIF: ₹1 crore, usually committed and drawn down
- PMS: ₹50 lakh, paid upfront
- SIF: ₹10 lakh, measured across all strategies of that fund at PAN level
- GIFT City restricted scheme: from US $150,000
- Mutual fund: a few hundred rupees