Top VC firms, including IvyCap Ventures, Speciale Invest, Chiratae Ventures, and Kalaari Capital, are among the first cohort shortlisted under the scheme, sources in the know told Business Standard.
The cohort, comprising nearly 20 alternative investment funds (AIFs), is expected to be announced this month, according to several sources in the know. This is likely to be followed by a second cohort announcement in October-Nove- mber this year, they added. The deadline for submission of applications was January 31.
The government had received nearly 200 applications for SLFMs, with nearly 80 per cent from VC firms alone.
In addition to AIFs, other second-level fund managers eligible to apply include development finance institutions, non-banking finance corporations, and focused research organisations.
“Broadly, the government has received applications for fund sizes of around ₹2,000-2,500 crore. The government can invest any amount up to 50 per cent. We have learnt that the government will announce the first cohort this month,” a source aware of the developments told Business Standard.
Some of the firms that have applied for the fund include Mela Ventures, 3one4 Capital, All In Capital, Celesta Capital, Wyser Capital, pi Ventures, Translation Endeavors, AdvantEdge, Sixth Sense Ventures, Ideaspring Capital, and Blume Ventures, among others, sources said.
The Department of Science & Technology (DST), which is the nodal ministry for the fund, did not respond to an email query sent by Business Standard till the time of publishing.
As per the guidelines, the government can invest up to 50 per cent of the amount in selected AIFs and become limited partners in the fund.
Even as the first cohort is expected to be announced this month, a few firms flagged the slow process and lack of communication around the fund. “Funds and founders like us have had applications pending for eight to 10 months. No clarity and answer whatsoever… You do not get to call yourself deep-innovation-first while your committee moves slower than the technology it is funding. By the time the file clears, the AI (artificial intelligence) it was meant to back has already come and gone,” Aditya Singh, partner and cofounder, All In Capital wrote in a social media post.
The government is using the quality and cost-based selection (QCBS) method for shortlisting, where it is assigning an 80 per cent weight to quality, which refers to the competence to support companies, including startups, in scaling RDI-intensive technologies. The second parameter is the cost criteria, weighted at 20 per cent, that refers to the management fees and other factors.
Essentially, the fund is evaluating AIFs on three broad parameters: their ability to manage investments and generate consistent returns; their experience and capability in backing RDI-intensive technology companies, and their success in mobilising private capital.
The concerned ministry has not decided how many second-tier managers it will select. However, as per the available documents, there can be future rounds where it can invite fresh applications. The fund was launched last year.
Unlike in the case of nominated second-level fund managers which include two focused-research organisations, the Biotechnology Industry Research Assistance Council (BIRAC) and the Technology Development Board (TDB), where the government has set aside ₹2,000 crore for the ongoing financial year, no specific amount has been earmarked for AIFs.
In the Union Budget 2026-27, Finance Minister Nirmala Sitharaman topped-up the fund with a ₹20,000 crore allocation, similar to last year’s budgetary allocation.
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