SEBI’s SIF Push Spurs Mutual Fund Entry by AIFs, Wealth Managers

India's mutual fund industry is witnessing a new wave of entrants as firms from the alternative investment and wealth management segments increasingly pursue mutual fund licences.

This trend has gained momentum following the Securities and Exchange Board of India’s (SEBI) regulatory reforms, particularly the introduction of Specialised Investment Funds (SIFs), which are influencing how investment products are structured and offered.

New Players Enter the Mutual Fund Arena

As of March 31, 2025, SEBI's official records indicate that 5 companies have pending applications for in-principle approval to launch mutual funds. These include AlphaGrep Securities, Monarch Networth Capital, Marcellus Investment Managers, Wealth First Portfolio Managers, and Nuvama Wealth Management.

Among them, AlphaGrep Securities recently confirmed that it has received SEBI's in-principle approval to sponsor a mutual fund business. Similarly, JioBlackRock, a joint venture between Jio Financial Services and BlackRock, has also secured preliminary approval and has already filed draft documents to launch three debt mutual fund schemes.

In recent months, SEBI has granted licences to several other players, including Pantomath Capital Advisors and Capitalmind Financial Services, though their final approvals are still under process.

SEBI’s SIF Framework Driving Structural Shift

The recent interest in mutual fund licences comes on the back of SEBI's introduction of Specialised Investment Funds (SIFs). These funds require a lower minimum investment of ₹10 lakh—significantly less than the ₹50 lakh and ₹1 crore thresholds required for Category III Alternative Investment Funds (AIFs) and Portfolio Management Services (PMS), respectively.

This change has made mutual funds more accessible to a broader base of affluent investors, effectively challenging the viability of traditional AIFs and PMS offerings.

Tax Efficiency Fuels the Migration

Beyond accessibility, mutual funds also offer a more favourable tax environment. Long-term capital gains from mutual funds are taxed at just 12.5%, compared to 30% for resident investors and 39% for non-residents in the AIF space. This significant tax differential is further encouraging investment firms to realign their strategies in favour of mutual fund structures.

Read More: Upcoming NFOs This Week: 2 New Mutual Funds Opening From June 16, 2025.

Conclusion

With regulatory shifts and tax incentives converging, the mutual fund landscape in India is poised for structural change. More AIFs, PMS providers, and wealth managers are expected to pursue mutual fund licences, not just as a strategic diversification move, but as a necessary evolution in a changing regulatory environment.

As SEBI’s SIF framework continues to unfold, it may well redefine how sophisticated investment products are offered and accessed in the country.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.