SEBI Proposal Mandates Reporting of NAVs by AIFs to Depositories

On September 19, 2025, the Securities and Exchange Board of India (“SEBI”) issued a draft circular (“Draft Circular”) seeking comments from the public on a proposal to regulatory framework for reporting the value of Alternative Investment Fund (AIF) units to depositories. 

In terms of Regulation 23(2) of SEBI (Alternative Investment Funds) Regulations, 2012 (“SEBI AIF Regulations”), Category I and Category II AIFs are required to undertake a valuation of their investments at least once every six months (or, if approved by 75% of investors by value, once every 12 months) through an independent valuer and disclose the same to their investors. Category III AIFs shall ensure that the NAV must be disclosed at least on a quarterly basis for close-ended funds and on a monthly basis for open-ended funds.

With effect from November 1, 2023, for schemes of AIFs with a corpus of INR 500 crore or more, and from May 1,2024 for schemes with a corpus of less than ₹500 crore, AIFs are required to issue their units in dematerialized form as per Regulation 10(aa) of the SEBI (AIF) Regulations, 2012.

In order to promote transparency in the AIF ecosystem, SEBI proposes to leverage upon the depository infrastructure and require AIFs to maintain the NAV of their units in the depository system.

SEBI’s Draft Proposals

The Draft Circular proposes the following: 

• AIFs or their registrar and transfer agents (RTAs) are required to upload the net asset value (NAV) of all AIF units as per their respective ISINs, into the depository system.
• The NAV must be uploaded within 15 days from the date of valuation of the investment portfolio. For this purpose, the valuation date shall be the date of the valuation report where an external valuer is appointed, or the date of valuation as documented in the fund’s internal records where an internal valuer is engaged, as may be applicable.
• In the case of existing AIF schemes, the latest NAV must be uploaded to the depository system within 45 days from the issuance of this circular (if this proposal is approved).
• A definition of “Co-investment scheme” has been inserted in the AIF Regulations to cover schemes created by Category I or II AIFs to facilitate co-investment by investors in their schemes. 
• Depositories are mandated to create the necessary infrastructure to facilitate NAV uploads, amend their rules accordingly, and notify their members about these new requirements.
• The trustee or sponsor of the AIF shall ensure that compliance with the requirements of this circular is covered in the compliance test report prepared by the investment manager.

Exemptions: Co-investment schemes are exempt from Regulations 10, 11, 12, 13, 15, 16, and 17 of the AIF Regulations which prescribe requirements such as minimum corpus, the sponsor’s or investment manager’s continuing interest, mandatory disclosures, tenure etc. 

As specifically stated in the minutes of SEBI’s Board meeting held on June 18, 2025, the Co-Investment PMS licence route provided for by the SEBI PMS Regulations has been preserved. 

The Draft Circular can be found here.

We hope you have found this information useful. For any queries/clarifications please write to us at insights@elp-in.comor write to our authors: 

Vinod Joseph, Partner – Email – vinodjoseph@elp-in.com

Akhil Ganatra, Associate- Email- akhilganatra@elp-in.com