IFSCA Circular Allows Senior and Junior Units and Grants in GIFT IFSC Venture Capital and Restricted Schemes
The International Financial Services Centres Authority (IFSCA) issued Circular F. No. IFSCA-DSF0SFHB/1/2025-Capital Markets dated September 25, 2026, setting out a framework for differential distribution in Venture Capital Schemes and Restricted Schemes. It is aimed at blended finance and similar fund structures and takes effect immediately.
Background
The framework rests on regulation 23(5) and regulation 35(6) of the International Financial Services Centres Authority (Fund Management) Regulations, 2025 (FM Regulations), and is issued under sections 12 and 13 of the International Financial Services Centres Authority Act, 2019. IFSCA says it is intended to support the vision of making GIFT IFSC a gateway to global debt and equity capital for sustainable and climate projects. It follows the recommendations of the Expert Committee on Sustainable Finance, industry representations, public consultation feedback and advice of the Fund Management Advisory Committee.
Blended finance combines concessional or philanthropic capital with commercial capital to fund projects that are socially desirable but may be commercially unviable. The Expert Committee had recommended facilitating it at IFSC to attract concessional financing from Multilateral Development Banks and Development Financial Institutions, reducing the risk for private investors.