BY: admin
Why Deep Tech and Defence Startups Are Attracting Investor Interest in India
India’s venture story is undergoing a change in emphasis. For much of the last decade, capital flowed towards consumer internet and software platforms, where growth was quick and capital requirements were modest. Attention is now moving to companies built on proprietary science and engineering, and two areas in particular have come into focus: deep tech startups in India and the defence technology companies emerging alongside them. What is more consequential than any single funding round is the set of conditions that has formed around these sectors, from public policy to manufacturing volumes to export demand. A deeper base of founders and funding According to Tracxn, India is home to more than 8,800 deep tech startups in India, of which 1,821 have raised funding and seven have reached unicorn status. The proportion is instructive: a meaningful base of companies has already crossed the threshold from laboratory concept to institutional capital. Nasscom’s Indian Tech Start-up Report 2025 places total tech startup funding at USD 9.1 billion for 2025, an increase of 23 percent, with USD 2.3 billion directed to deep tech. Investors are evidently prepared to underwrite intellectual property and long development cycles alongside more familiar software models. The appeal is practical. Ventures built on patents, specialised research and difficult-to-replicate engineering acquire defensible positions once a product reaches the market, and the entry barriers that result can support durable businesses and returns over a longer horizon. Policy is building a floor of patient capital The Union Cabinet approved the Research Development and Innovation Scheme with a corpus of INR 1 lakh crore, providing long-term financing at low or nil interest rates to private sector research and making provision for a Deep-Tech Fund of Funds. For companies that need years rather than quarters to reach commercial scale, this establishes a supportive financing layer beneath the venture market. Defence innovation has a dedicated channel of its own. The iDEX scheme was approved with an outlay of INR 498.78 crore for 2021-22 to 2025-26, and the ADITI scheme with INR 750 crore for 2023-24 to 2025-26, both intended to bring startups into the development of technologies for the armed forces. Defence manufacturing is broadening its base India’s annual defence production reached a record INR 1.78 lakh crore in FY 2025-26, a rise of 15.6 percent over the previous year and 110 percent since FY 2020-21. Output of this scale generates steady demand for components, software, sensors and subsystems. The private sector contributed about 24 percent of that production, roughly INR 42,000 crore, up from 22 percent a year earlier. A growing private share leaves more room for defence startups in India to participate as suppliers, technology partners and system builders. The opportunity is broad. Modern defence platforms depend on electronics, drones, communication systems, advanced materials and software, and much of this work sits with specialised smaller firms. A startup that develops a reliable component or subsystem can become part of a long-running supply chain, where demand tends to recur rather than arrive as a one-off. Exports extend the addressable market Defence exports reached an all-time high of INR 38,424 crore in FY 2025-26, up 62.66 percent from INR 23,622 crore in the previous year, and Indian equipment now reaches more than 80 countries. Private companies accounted for INR 17,353 crore of that total. For early-stage companies, global demand offers a larger addressable market than domestic requirements alone, which matters when investors weigh long-term returns. Where the two sectors converge Many modern defence capabilities rest on deep technologies. AI-based surveillance, autonomous drones, secure communications, advanced sensors and space-based systems sit at the intersection of the two sectors, which means a single technology platform can often serve defence, aerospace and commercial customers. This dual-use character gives investors more than one route to revenue and reduces dependence on a single customer segment. Founders gain as well, since research undertaken for one application can carry across several markets, and funds with a long-term view have begun to study the two areas together. The road ahead The factors behind this interest are visible in the data. Funding is rising, policy has established a floor, production capacity is expanding and exports are opening larger markets. Technical depth and long-term demand, once treated as obstacles, are increasingly read as strengths, and that is why deep tech startups in India now receive sustained attention from investors. The same reasoning applies to defence startups in India, which benefit from government backing, wider private participation and global demand. Companies in both areas need time to test, certify and scale their products, and capital that remains invested for the full journey is best placed to support them. The coming years are likely to place these sectors at the centre of India’s innovation and investment story.
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BY: admin
Indian Capital, Indian Innovation: The Domestic Turn in Startup Investing
India’s alternative investment industry has reached a scale that is difficult to overstate. Alternative investment funds have grown into a USD 180 billion industry, compounding at 30.7 percent annually between fiscals 2015 and 2025. What is more consequential than the headline number, however, is the changing composition of the capital behind it. For the better part of a decade, Indian innovation was financed largely by foreign balance sheets. That dependency is now easing, and the shift in venture funding in India carries implications for founders and allocators alike. The domestic share has tipped past the halfway mark According to the third edition of No Ifs About AIFs, a benchmark-led study by Crisil Limited and Oister Global, SEBI data shows that domestic investor participation in Category I and Category II AIFs rose from 50.3 percent in March 2024 to 55.3 percent in September 2025, accompanied by an additional INR 1.14 lakh crore in inflows. The split is instructive: as of September 2025, Category I funds drew 73.1 percent of gross funds raised from domestic investors against 26.9 percent from foreign sources, while Category II funds stood at 53.0 percent domestic and 47.0 percent foreign. This mirrors a global pattern rather than diverging from it. United States state pension funds raised alternative asset allocations from 30 percent to 40 percent between June 2018 and June 2023, and the 2023 Fidelity Institutional Investor Study placed roughly 25 percent of US institutional portfolios in alternatives. India is following the same curve, from a lower base and at greater speed. Government capital is anchoring the asset class Government-backed institutions have supplied the foundation. The Small Industries Development Bank of India, the Self Reliant India Fund, the National Investment and Infrastructure Fund, the Ecosystem Development Fund, the National Bank for Agriculture and Rural Development, the Technology Development Board and the Biotechnology Industry Research Assistance Programme have collectively infused over INR 24,293 crore into AIFs. The policy pipeline extends further. The Union Budget 2026 announced a dedicated INR 10,000 crore fund for small and medium enterprises, alongside a top-up of INR 2,000 crore to the SRI Fund. The Union Budget 2025 had allocated INR 1,000 crore to the space economy, and the Department of Science and Technology launched the Research Development and Innovation Fund, allocated INR 1 lakh crore over six years with INR 20,000 crore earmarked for fiscal 2026 alone. Taken together, these commitments do more than add capital; they establish a floor of patient, long-horizon money beneath the domestic venture market, strengthening the base of venture funding in India. Family offices are stepping into venture Indian family offices have moved from opportunistic participation to considered allocation, and the depth already present in the market is best seen through the established names. PremjiInvest, the family office of Azim Premji, has backed approximately 51 startups, among them Mintifi, GIVA, Purplle and The Sleep Company, several of which have since become well-established ventures. Inc42 Media The character of this capital matters as much as its quantum. A family office carries a direct understanding of Indian consumer behaviour, market structure and the regulatory environment, and it operates without the compressed return horizon that governs other forms of institutional money. For an early-stage company, that combination translates into capital that can remain invested through a longer build cycle, accompanied by strategic guidance rather than capital alone. Founders are backing founders A parallel development is the emergence of the founder as an active angel investor. A generation of Indian entrepreneurs who built and scaled their own companies now maintains substantial early-stage portfolios, and their participation has become a recognisable feature of seed and pre-seed rounds. The scale is no longer marginal. Drawing on Tracxn data, Outlook Business reported that Kunal Shah, founder of CRED, backed 190 startups between 2021 and July 2026, with a broader portfolio approaching 300 lifetime investments spanning fintech, software-as-a-service, consumer internet and enterprise names such as Zetwerk, Shiprocket and BigBasket. He is one of many. Deep Bajaj, founder of Sirona, invested in approximately 20 startups in a single year across wealthtech, healthtech, petcare and wellness, while Mamaearth cofounder Ghazal Alagh has been an active angel investor alongside her cofounder Varun Alagh, and Unacademy cofounder Gaurav Munjal has built an early-stage portfolio of his own. Ritesh Malik, founder of Innov8, has invested in over 80 startups. Top Angel Investors India 2026: Founders Bag Big Wins +2 Several such investors have gone a step further, formalising their activity into structured family offices and micro funds with dedicated teams and defined mandates. Founder-led angel platforms have institutionalised in parallel; WeFounderCircle, a network of startup founders and angel investors backing early-stage companies, claims more than 150 investments to date across sectors, including Garuda Aerospace, Anveshan, Zypp, Pixxel and PeeSafe. Inc42 Media For early-stage startups, this capital is differentiated. A founder-investor has priced a product, managed a burn rate, navigated a difficult round, and hired a first sales leader. The resulting diligence is sharper, the post-investment support more operational, and the alignment more instinctive. Investor breadth has held up accordingly, with 1,108 unique investors participating in the ecosystem during the first half of 2026. Inc42 Media Alpha, diversification and a supportive exit market Underpinning all of the above is a straightforward portfolio calculation. HNIs, UHNIs and family offices are seeking superior risk-adjusted returns and reduced concentration risk as traditional instruments come under pressure from evolving macroeconomic conditions. Thematic and impact-oriented AIF strategies, particularly in technology and sustainability, allow capital to be aligned with specific mandates while pursuing enhanced returns. Exits have made that calculation credible. India’s startup ecosystem has created over 1.7 million direct jobs across fintech, healthtech, agritech and edtech, with more than 100 unicorns valued above USD 1 billion. IPO activity surged in fiscal 2024 with 209 companies going public, exceeding the combined total of fiscals 2022 and 2023. By the end of the first nine months of fiscal 2026, 261 IPOs had been launched, already surpassing the full-year total of 234 recorded in the preceding fiscal period. Improved
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BY: admin
What Is a SEBI Accredited Investor Certificate, and What Does It Take to Qualify?
Accreditation has become a term investors and wealth managers now need to understand in practical detail, not just recognise in passing. A SEBI accredited investor certificate is a formal recognition of an investor’s financial capacity, and it increasingly determines which investment opportunities an investor is even eligible to consider. This piece sets out what the certificate is, who issues it, exactly what it takes to qualify, and how SEBI’s most recent proposal could reshape the process. What the Certificate Actually Is An accredited investor certificate is a document issued by a SEBI-recognised accreditation agency confirming that an individual or entity meets specified income, net worth, or asset thresholds. It is not issued by SEBI directly. Instead, it is granted by accreditation agencies that are subsidiaries of stock exchanges and depositories, such as NSE, BSE, NSDL, and CDSL, operating under SEBI’s regulatory framework. The certificate itself carries a unique accreditation number, the applicant’s PAN, the name of the issuing agency, and a defined validity period. Holding this certificate is what allows an investor to be treated as an accredited investor under SEBI’s regulations, a status that can unlock relaxed disclosure norms, lower investment minimums, and greater flexibility in structuring terms across various SEBI-regulated investment products. Without the certificate, an investor is treated as a standard, non-accredited investor, regardless of their actual financial standing. Eligibility Criteria: The Financial Thresholds For an individual, Hindu Undivided Family, family trust, or sole proprietorship, eligibility is assessed against three alternative routes, and meeting any one of them is sufficient: An annual income of at least ₹2 crore; or A net worth of at least ₹7.5 crore, of which not less than ₹3.75 crore must be held in financial assets; or A combined test of an annual income of at least ₹1 crore together with a net worth of at least ₹5 crore, of which not less than ₹2.5 crore must be held in financial assets. For body corporates and trusts other than family trusts, the threshold is a net worth of at least ₹50 crore. Partnership firms are not assessed as a single entity. Each partner must independently meet the applicable individual criteria before the firm can be treated as accredited through that partner’s participation. Documents Required and How the Application Works The application is submitted online, directly through the portal of a SEBI-recognised accreditation agency, and an investor may choose whichever agency is most convenient, as there is no requirement to apply through a specific one. The typical documentation includes: PAN and a valid identity or address proof, such as an Aadhaar card or passport Income tax returns for the relevant preceding financial year or years, depending on the eligibility route being claimed A net worth certificate from a practising chartered accountant, generally required to be dated within six months of the application, along with the underlying working for how the net worth or liquid net worth has been calculated For body corporates, financial statements and income tax returns for the last three financial years, along with a statutory auditor’s certificate confirming net worth as on the date of application Once submitted, the accreditation agency verifies the application against the supporting documents and the applicant’s KYC records. With complete documentation, applications are typically processed within three to seven working days, after which the agency issues the certificate along with its unique accreditation number. Fees for processing are set by the individual accreditation agency and vary accordingly, so it is worth checking the current fee schedule on the chosen agency’s portal before applying. How Long the Certificate Lasts Validity is tied to how many years of financial data the applicant is able to demonstrate at the time of application. A certificate is generally valid for one year by default, extending to two years where the applicant meets the eligibility criteria based on the preceding financial year, and up to three years where the criteria are met across the preceding two financial years. Newly incorporated entities that meet the net worth criteria but lack financial history for a full preceding year are typically granted a two-year validity. Once a certificate lapses, the investor must reapply and requalify to retain accredited status. SEBI’s August 2026 Proposal: A New Route to Accreditation In a consultation paper released on 13 August 2026, SEBI proposed a fourth eligibility route based purely on securities market holdings, rather than income or net worth. Under the proposal, an individual holding at least ₹5 crore in eligible securities market assets, such as listed equity, mutual fund units, AIF units, REIT and InvIT units, and certain other holdings, would qualify as accredited without separately demonstrating income or net worth. The threshold proposed for body corporates under this route is ₹20 crore. SEBI estimates that this route alone could bring roughly 3.7 lakh additional investors into the accredited pool, a significant expansion from the 3,820 accredited investors recorded as of 31 July 2026. The same paper proposes simplifying verification further, allowing an eCAS statement from a depository, a recent broker statement, or a chartered accountant’s certificate to serve as proof under the new securities-assets route. It also proposes permitting investment managers to determine and record an investor’s accredited status directly during onboarding, as an alternative to routing every applicant through an external accreditation agency, along with recognising accreditation at the group-entity level across AIFs, SIFs, and PMS. These proposals were open for public comment until 3 September 2026, and none of them are in force yet. Investors should continue to rely on the existing criteria and process described above until SEBI notifies a final rule. Conclusion Accreditation is, at its core, a paperwork exercise with an outsized payoff. The eligibility bar is fixed and well defined, the documentation is standard financial proof most qualifying investors already have on hand, and the process runs entirely online through an agency of the investor’s choosing. What it unlocks in return, access to a widening set of SEBI-regulated products under relaxed norms, makes it worth completing well before a specific
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