EPFO is drafting guidelines to invest a portion of fresh annual accretions in Category I and II AIFs, after regulators cleared the path five years ago.
In a Thursday investment‑committee session, officials debated routing worker capital through NIIF and Sidbi’s Startup India Fund of Funds 2.0, in response to a DPIIT letter.
The central board of trustees, led by Labour Minister Mansukh Mandaviya, will vote on the proposal in November, a move that could tilt the pension fund away from low‑risk debt.
Industry observers say the shift would aim for higher long‑term returns for the 30 crore subscribers who hold ₹30 lakh crore, while embedding safeguards such as a ₹100 crore minimum corpus and caps on single‑fund exposure.
The EPFO’s initiative follows the finance ministry’s 5% rule for asset‑backed and trust‑structured investments, but it is the first time the body will engage with Category I and II AIFs, a fact noted by senior financial analysts.
Once the board approves in November, EPFO could start allocating capital to high‑growth startups, potentially altering the dynamics of India’s startup funding ecosystem.