In 2025, GIFT IFSC experienced a notable decline in new Alternative Investment Fund (AIF) setups despite a sharp increase in the investor base.
The dip in fresh fund registrations contrasted with the continued expansion seen in the broader Indian AIF market.
The number of new AIFs registered in GIFT IFSC dropped over 40% in 2025, falling to 57 compared to 106 in 2024. However, the total number of investors rose to 4,733, indicating growing confidence and engagement with IFSC-based schemes.
As of December 10, 2025, the cumulative registered AIFs in GIFT IFSC stood at 256, with Category III funds accounting for 61% of these.
While GIFT IFSC witnessed a decline, mainland SEBI-regulated AIF registrations continued to rise. In 2025, registrations grew by 20% with over 150 launches, pushing the total to 1,710 from just 16 in 2012.
Category II led with 942 registrations, followed by strong growth in Category III, which saw a 32% CAGR over a decade, and a 48% annual jump in Category I funds.
Private market exposure remained significant at about 65%, with ₹3.76 lakh crore of ₹5.75 lakh crore in total deployed investments. Listed assets accounted for ₹1.99 lakh crore (35%), showing a 49% YoY growth, primarily from Category III funds focused on REITs, InvITs, and structured products.
The surge in equity-linked products and systematic strategies reflected changing investment preferences amid low primary activity. Direct equity still led with a 68% share in listed allocations.
Read More: GIFT City: The New Frontier for Global Stocks, Mutual Funds and NRI Insurance!
Enterprises continued to attract major allocations with 90% share going to startups. MSMEs saw notable gains, small enterprises increased 315% YoY, micro 76%, and medium 71%.
Private credit, with AUM between ₹2 lakh crore and ₹2.5 lakh crore, gained traction by filling formal banking gaps. Quant strategies also advanced with AUM touching ₹2,300 crore.
In 2025, domestic capital flows climbed 40% YoY reaching ₹4.7 lakh crore, significantly outpacing foreign inflows, which grew 14% YoY to ₹2.5 lakh crore.
FPI contributions declined 87% YoY due to reduced Category II activity amid global headwinds. Structural reforms by SEBI around co-investment, accredited investor schemes, and angel fund rules improved ease of investing.
The decline in new AIF setups at GIFT IFSC during 2025 was accompanied by a rise in investor counts, showing selective consolidation amid strong activity in the Indian AIF landscape. Portfolio allocations remained balanced across listed and private markets supported by regulatory developments and domestic investor participation.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jan 21, 2026, 12:09 PM IST
Team Angel One
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