RDIF will leave such decisions to the professional judgement of the SLFM management team and Investment Committee.

RDIF funds will be disbursed against the issue of a Drawdown Notice by an SLFM.

It is clarified that RDIF expresses no preference between different Contribution Modes. Once selected to become an SLFM, an AIF can select any Mode of its own preference.

It is clarified that RDIF would seek to ensure that Eligible Technology Entities receive funds on terms that reflect the extended gestation periods of RDI scaling. Accordingly: while RDIF does not define a specific preferred life or tenure for SLFMs, RDIF would

1. Provide funding via (a) Contribution to AIF mode, on an extended tenure – illustratively, up to 15 years (b) Loan mode, on an extended tenor – illustratively, up to 20 years;
2. Require that SLFMs pass on these benefits to Eligible Technology Entities;
3. Select SLFMs on the basis, inter alia, of the alignment of their investment theses with the RDIF Investment Policy.

Noting that RDIF would require SLFMs to provide moratoria on principal and interest payable from Eligible Technology Entities (per IG Part C Para 6), RDIF would extend moratoria to SLFMs in which it invests in the Loan mode. These terms would be finalised on the recommendation of competent RDIF authorities, ahead of entering the Loan agreement.

Loans provided by RDIF are expected to be unsecured. In accordance with the Implementation Guidelines, SLFMs receiving funding from RDIF will make funds available to Eligible Technology Entities (as defined in Paragraph 6), including startups scaling R&D from Technology Readiness Level (TRL) 4 onward, through financing or refinancing via:

• Long-term loans, including optionally convertible debt, which are expected to be unsecured;
• Equity investments, particularly in the case of startups; or
• A combination of debt and equity instruments.

Net interest margins must be maintained under a maximum limit of 3% by all SLFM channelling RDIF financing in the Loan modality

AIFs would be evaluated and selected based entirely on the Quality criteria outlined by Evaluation Matrix 5.1 in Section 5 and Cost criteria listed in Section 6 in the Notice Inviting Applications. Choice of Mode will not affect an Applicant’s prospects in any way.

RDIF Guidelines do not specify a maximum limit on the quantum of contribution it would provide to an SLFM. However, RDIF contributions to AIFs as a percentage of aggregate capital would be determined reflecting the AIFs’ focus on RDI-intensive technologies and RDIF Priority sectors, so as to enable increased RDIF funding to these technologies and sectors.

RDIF contributions to AIFs are determined as a percentage of aggregate capital, reflecting the Fund’s focus on RDI-intensive technologies and RDIF Priority Sectors.

RDIF will contribute to the aggregate commitment of an SLFM as follows:

1. For SLFMs that intend to focus exclusively on RDI-intensive technologies and RDIF Priority Sectors: up to 50% of the aggregate commitments to the SLFM;
2. For SLFMs that will focus both on RDI-intensive technologies and RDIF Priority Sectors, and on other technologies and sectors: X% of the aggregate commitment to the SLFM, where
   1. X% of aggregate commitment is contributed by RDIF, and may only be used for Eligible Technology Entities focusing on RDI-intensive technologies and RDIF Priority Sectors;
   2. A matching X% of aggregate commitment must be drawn by the SLFM from contributors other than RDIF, and used only for Eligible Technology Entities focusing on RDI-intensive technologies and RDIF Priority Sectors;
   3. Y%, which is 100-2X, of aggregate commitment would be drawn by the SLFM from contributors other than RDIF; and may be used for companies and startups focusing on any technologies and sectors that the SLFM chooses, other than RDI-intensive technologies and RDIF Priority Sectors.

To clarify practical investment obligations, SLFMs are required to invest both RDIF capital and the matching private capital in Eligible Technology Entities that focus on RDI-intensive technologies and RDIF Priority Sectors.

Examples of Contribution Quantum are tabulated below:

RDIF does not specify a maximum quantum of investment or ticket size for its contributions or loans to SLFMs. RDIF’s maximum contribution as a percentage of aggregate contribution will reflect the SLFM’s focus on RDI-intensive technologies and RDIF Priority Sectors.

SLFMs need to choose one of the three Modes or suggest another Mode which conforms to SEBI regulations.

RDIF ensures accountability with strong institutional safeguards, outlined below:

1. Distributed approval process. Any decision to select Second Level Fund Managers must clear, consecutively, the RDIF Management Team, the Executive Council ANRF (informed by the recommendation of its Expert Advisory Committee), and the Empowered Group of Secretaries (EGoS). All three entities must agree on selecting a fund manager, before RDIF can finance it. Each differs from the others in its membership. This requires every investment case to be evaluated afresh at each stage, entirely on its own merits, before it can be approved.
2. Credible approval structures. The Executive Council of ANRF comprises Union Secretaries, chaired by the Principal Scientific Advisor to the Government of India. EGoS comprises Union Secretaries, chaired by the Cabinet Secretary. This protects RDIF investment decisions from compromise.
3. Air-gapped RDIF/SLFM decision-making. The RDIF Implementation Guidelines specifically state that (a) the Executive Council of ANRF shall not decide nor approve names of members of the Investment Committee in any SLFM (b) no such Investment Committee shall have any ex officio members from the government. This equips SLFMs with autonomy in allocating capital, as long as they comply with the general focus outlined in the Guidelines.
4. Strict conflict of interest provisions. The RDIF Implementation Guidelines require provisions against conflict of interest across approval and investment levels. These are monitored continuously by RDIF and its leadership tiers.

RDIF has not made any predetermination regarding specific quantified allocations of its capital to particular SLFM types or via particular modalities.

RDIF will be assessed in its performance according to a number of factors, including (but not restricted to) intellectual property generation, technological advancement, commercialisation and industry impact, etc. These will shape RDIF priorities in making investment decisions.

RDIF is also required to return its capital to the Consolidated Fund of India, starting in its 50th year. RDIF will therefore seek returns in a manner that allows it to fulfil this mandate.

Total RDIF financing shall be limited to not more than 50 per cent of the total assessed cost of the project.

As specified in the Implementation Guidelines:

• For Eligible Technology Entities receiving debt funding (via loan or optionally convertible debt) from the SLFM, this shall be calculated as 50% of the project cost, as specified in a proposal for achieving clearly-defined deliverables and outcomes of a project.
• For Eligible Technology Entities receiving funding via equity or equity linked instruments from the SLFM, this shall be calculated as 50% of the value of each funding round. This value would be considered when it constitutes the entire cost of achieving the objectives proposed at the time of raising the funds. At every stage of funding, RDIF funding will remain 50%.

As specified in the Implementation Guidelines, RDIF requires from all SLFMs, in a format to be approved by the Executive Council and adapted to the specific requirements of each Investment Stream:

1. Reports within 60 days of the end of every six-month period, from the date of execution of the Contribution/ Investment / Loan agreement between RDIF and the SLFM: including unaudited financial statements of the SLFM, and status reports on the SLFM’s investments (including investee companies, technologies, sectors, and other criteria defined by the RDIF Investment Policy);
2. Annual reports within 90 days of the conclusion of every fiscal year including audited financial statements and annual valuation of the assets of the SLFMs; a statement of account in relation to the units held by RDIF as a contributor; and status reports on the SLFM investments (including investee companies, technologies, sectors, and other criteria defined by the RDIF Investment Policy);
3. The ability to visit Eligible Technology Entities invested in by the SLFMs to observe performance;
4. Meetings with SLFM teams for joint review.

Note: RDIF shall retain the right to audit any SLFM via a professional agency.

RDIF will not involve itself in individual investment decisions made by SLFMs. RDIF officials will neither require nor accept membership in SLFM Investment Committees. However, RDIF will require periodic reports from SLFMs on investee companies, technologies, sectors, and other criteria defined by the RDIF Investment Policy. RDIF shall retain the right to audit any SLFM via a professional agency.

Deployment timelines, allocation methodology, and the degree of patience or duration flexibility are already addressed in the RDIF Implementation Guidelines. There are no ticket sizes specified. The overall structure of capital commitments will be determined by RDIF during the processing of applications. May also refer to the answer to Question No 60 of this document.

Under Evaluation Matrix 5.1 (Quality Criteria for AIFs, DFIs, and NBFCs), an applicant’s track record is assessed based on the average value of investments, across previous Funds for AIFs or across the past five years for DFIs/NBFCs to indicate familiarity with managing investment ticket sizes across various amounts.

RDIF would provide loans to SLFMs at an interest rate to be determined by the Executive Council ANRF, on a case-by-case basis. These would be on concessional terms, including lower rates and longer tenors than those offered by private investors. SLFMs would be required to provide loans to Eligible Technology Entities at a net interest margin not exceeding 3%.

To ensure its mandate, RDIF will review SLFMs periodically, as specified in Part B Paragraph 8 of the RDIF Implementation Guidelines.

RDIF officials will not be members of the SLFMs’ Investment Committees. The RDIF Management Team, and governance structures including the Executive Council and its Committees, and the Empowered Group of Secretaries, will not be party in any way in any individual investment decision by any individual SLFM. However, RDIF will monitor and review investments made by SLFMs.

RDIF funds shall be used exclusively for the core purpose for which Government has established RDIF. To this end, SLFMs receiving RDIF funds shall comply with the General Provisions to ensure RDIF mandate, specified in Paragraph 8 of Part B of the Implementation Guidelines. SLFMs must adhere at all times to the terms specified in the RDIF Implementation Guidelines, and the Contribution Agreement or Loan Agreement entered with RDIF.

RDIF expects to sign its first contribution agreements with AIF SLFMs by the end of April/May 2026 or as soon as the evaluations of SLFM applications have been completed.

Section 2 Paragraph 2 (ii) of the RDIF Notice Inviting Applications specifies that existing AIFs that have not yet achieved final close are eligible to be selected as SLFMs.

It is clarified that the specifics of investment quanta (i.e. ticket sizes) for financing from SLFMs to Eligible Technology Entities is left to the professional judgement of the SLFMs, and RDIF does not provide grants.