Loss-making fund houses may slip up on net worth norm

Experts say even if the norm is met, sustaining it will be a challenge for loss making fund houses

Most of the 40-odd mutual fund houses are likely to adhere to the May 2017 deadline set by the Securities and Exchange Board of India (Sebi) to raise their net worth to Rs 50 crore. However, experts believe that sustaining the net worth may be a challenge, especially for AMCs that are making losses.

Fund houses, especially the smaller ones, have been steadily upping their net worth over the last year. Quantum MF met its net worth requirement in September, while Union KBC MF did so in December. Last week PPFAS MF announced that it had complied with the Sebi criteria.