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SEBI Forces ₹76,000 Crore Fund Shake-Up
3 Mar
Summary
- Mutual funds must reallocate ₹76,000 crore portfolios.
- SEBI's new rules target excessive overlap between schemes.
- A three-year window is provided for compliance.
Mutual fund houses are mandated to restructure portfolios totaling around ₹76,000 crore to align with new Securities and Exchange Board of India (SEBI) regulations designed to minimize scheme overlap. An analysis indicates that numerous sectoral and thematic schemes currently exhibit substantial portfolio overlaps with other equity funds from the same company, excluding large-cap funds.
SEBI has established a three-year compliance framework, requiring 35% of overlapping exposure to be adjusted in the first year, an additional 35% in the second, and the remaining 30% in the third. Despite the substantial asset value involved, the staggered approach is not expected to be highly disruptive to the overall market liquidity.
Elara Securities estimates that actual selling pressure could be considerably lower, potentially ranging from ₹6,135 crore to ₹5,890 crore, depending on the adjustment strategy. The most significant overlaps are observed in highly liquid large-cap stocks, which are well-positioned to absorb these adjustments. Notable overlap cases include schemes from Quant, Motilal Oswal, and Aditya Birla Sun Life asset management companies.
