SEBI Proposes ₹1,000 Minimum Investment in Social Impact Funds

Consultation Paper; Dated: 09.02.2026

The Securities and Exchange Board of India (SEBI) has proposed a set of measures aimed at deepening the social finance ecosystem, enhancing retail participation, and improving fund-raising flexibility for Non-Profit Organisations (NPOs) through Social Impact Funds (SIFs) and the Social Stock Exchange (SSE).

1. Reduction in Minimum Investment for Individual Investors in SIFs

SEBI has proposed a significant reduction in the minimum investment amount for individual investors in Social Impact Funds:

• Current minimum investment – ₹2 lakh
• Proposed minimum investment – ₹1,000

1.1 Objective

• Enable small and retail investors to participate in social investments
• Expand the investor base for SIFs
• Facilitate greater capital flow into securities of NPOs through SIFs

This proposal is expected to democratise access to social impact investing.

2. Extension of Registration Validity for NPOs on SSE

SEBI has also proposed extending the registration period for NPOs on the Social Stock Exchange:

• Current registration period – 2 years
• Proposed registration period – 3 years

2.1 Key Features

• The extension will be allowed without requiring NPOs to undertake fundraising through the SSE during the extended period
• Such extension will be subject to approval of the Social Stock Exchange (SSE)

2.2 Rationale

• Provide NPOs with greater operational flexibility
• Reduce regulatory pressure to raise funds within a short timeframe
• Support long-term planning and readiness for fundraising

3. Reduction in Minimum Subscription for Zero Coupon Zero Principal Instruments

SEBI has further proposed to reduce the minimum subscription requirement for issuance of Zero Coupon Zero Principal (ZCZP) instruments:

• Current minimum subscription – 75%
• Proposed minimum subscription – 50%

3.1 Condition Attached

The reduction will be subject to the following safeguard:

• Social Stock Exchanges must undertake appropriate due diligence of the fundraising documents
• SSEs must satisfy themselves regarding the feasibility of project implementation at the lower subscription level
• Approval to raise funds will be granted only after such assessment

This measure seeks to balance fund-raising flexibility with investor protection and project viability.

4. Overall Regulatory Objective

The proposals aim to:

• Encourage retail participation in social impact investing
• Strengthen the SIF and SSE ecosystem
• Improve fund mobilisation for NPOs
• Maintain robust due diligence and governance standards

5. Key Takeaway

SEBI’s proposals mark a significant step towards inclusive social finance, by lowering entry barriers for investors, extending operational flexibility for NPOs, and enabling pragmatic fundraising thresholds—while ensuring oversight through enhanced SSE due diligence.

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