DPI is the Metric That Turns Returns Into Reality

As India’s AIF ecosystem scales, the market’s performance conversation naturally widens beyond marks. Marks will always exist in private markets, even in the most developed ecosystems. What changes with scale is what the market wants alongside marks: clear evidence of realisation, distribution behaviour, and timelines that investors can map to.

IRR remains essential, but it answers a different question. It describes how value has compounded over time, including unrealised value still sitting in the portfolio. DPI strips the story down to cash: what has been returned so far relative to what went in. Used together, they separate performance that is progressing on paper from performance that has begun to convert into distributions.

DPI is a multiple

DPI is a realisation multiple. That distinction changes what you can responsibly conclude from the data.

IRR answers a time-weighted question: how efficiently did value compound over the holding period, including unrealised value. DPI answers a cash question: how much money has come back relative to money put in.

Neither metric replaces the other. A market becomes more credible when it can discuss both without discomfort, because strong private markets ultimately need two things at once: value creation and reliable pathways for turning value into realised cash flows.

What the report’s DPI data shows

No Ifs About AIFs 3.0, Oister Global and Crisil’s third benchmarking report has benchmarking cycle as of March 31, 2025, which covers 170 schemes in the aggregated universe (VCFs and equity funds invested exclusively in unlisted equities; vintages up to FY21), and it notes that 142 schemes had made distributions.

Among schemes that have made distributions, it reports an average DPI of 0.72x for the aggregated benchmark, with 2.03x for top quartile funds and 1.32x for the top 50% (by DPI).

The spread matters more than the average. It indicates that realised outcomes are not evenly distributed. Some funds return meaningful capital, some return modest capital, and many are still early in the realisation arc.

The report makes the dispersion explicit. For the top 50% of schemes by DPI, outcomes range from around 5.03x down to 0.33x. For the top quartile, it shows a maximum DPI around 5.03x and a minimum around 1.01x.

This is the kind of data that forces a more adult reading of the market. Even within good outcomes, there is a wide difference between funds that have returned some capital and those that have returned substantial capital.

Most frustrations in private markets are not about whether value can be created. They are about when that value turns into liquidity. The report puts numbers on payback timelines. In the aggregated benchmark, 60 schemes returned at least 50% of paid-in capital and 47 schemes returned at least 75%, with an average time of around six-and-a-half years to return 75% of contributed capital.

It also notes that only about 25.35% of schemes in the aggregate benchmark had reached 1.0 DPI, taking an average 7.21 years to reach that milestone.

Private markets can have long payback arcs even when the ecosystem is broadly functioning. As the AIF pool scales, perceived maturity is increasingly shaped by whether these timelines feel explainable and repeatable rather than surprising and occasional.

Why DPI becomes more central as the AIF pool grows

The report shows that by September 2025, total AIF commitments were around Rs 15.05 lakh crore, compounding at 30.7% CAGR between FY21 and H1FY26. It also notes that AIFs increased their share of managed investment product AUM from 1.4% in 2017 to 6.9% by March 2025.

At that size, distribution behaviour becomes a system property. Two implications follow. First, allocators become more sensitive to the difference between return generation and return realisation. It becomes harder to talk about private markets performance in the singular when cash-flow experiences vary widely across funds. Second, liquidity design becomes a co-author of performance. When the ecosystem has workable pathways for realisation, DPI becomes less dependent on perfect timing.

DPI reveals the same structural truth as return dispersion

A market with many funds is a market where averages mislead. The report’s returns benchmarking makes this point through IRR dispersion. DPI makes the same point in cash terms. Realised outcomes vary widely, and the spread is large.

As fund counts and strategies expand, dispersion becomes more visible, and the allocator experience becomes more dependent on selection and execution discipline than on the “category beta” of private markets.

DPI and secondaries

The report’s secondaries section helps explain why DPI is becoming a bigger topic. It frames secondaries as a liquidity mechanism, defining them as transactions where an investor transfers existing interests to another party without new capital being raised, enabling an early exit prior to scheduled maturity.

It also states that as India’s PE and VC markets mature and more AIF vintages build NAV, mid-cycle liquidity demand increases, and exit execution becomes a primary driver of realised outcomes.

DPI is increasingly about whether the ecosystem can create liquidity pathways before the traditional exit moment. As secondaries deepen, the timing of realisation becomes less hostage to IPO windows or strategic M&A cycles. That is a sign of a market building more than one route to liquidity.

Key takeaways

DPI moves the discussion from performance storytelling to performance mechanics. IRR captures how value compounds, including unrealised value. DPI captures what has actually been returned. In a market where vintages are stacking and liquidity pathways are expanding, DPI becomes a credible test of whether private markets are converting value into cash outcomes over time. DPI is where performance meets liquidity: it records what has been realised, how long it takes, and why ecosystem plumbing like secondaries increasingly matters to outcomes.

Research Analyst

Simran Mehla

Frequently Asked Questions

Q: What is DPI?

A: DPI (Distributions to Paid-In) measures cumulative cash distributions returned to investors divided by total capital contributed.

Q: How is DPI different from IRR?

A: IRR reflects the time-weighted efficiency of value creation (including unrealised value); DPI reflects realised cash returned relative to cash invested.

Q: Why is DPI getting more attention in India now?

A: As AIF vintages stack and the market scales, realised cash flows and distribution timelines become more central to how outcomes are judged.

Q: What does a DPI of 1.0 mean?

A: It indicates cumulative distributions equal the capital paid in (full payback of contributed capital, before considering remaining NAV).

Q: How do secondaries connect to DPI?

A: Secondaries add a liquidity pathway that can support realisation and flexibility before traditional exits, which affects how and when cash outcomes show up.

Sources

No Ifs About AIFs 3.0