Mutual Funds scheme-minimum-corpus

Scheme minimum corpus

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Scheme minimum corpus is the SEBI-mandated minimum AUM threshold that a mutual fund scheme must reach during the NFO (New Fund Offer) subscription period for the scheme to launch operations. If the corpus minimum is not achieved, the scheme is not launched and subscription amounts are returned to investors.

Framework

Minimum corpus per scheme category

  • Open-ended equity / hybrid: Rs 10 crore minimum.
  • Open-ended debt: Rs 20 crore minimum.
  • Close-ended schemes: Higher minimums (Rs 50 crore+).

The amounts have been revised periodically by SEBI.

Minimum unitholder count

  • Must have minimum 20 investors during NFO.
  • No single investor can hold more than 25% of corpus.

Why minimums

  • Operational viability.
  • Cost-amortisation requires meaningful AUM.
  • Prevents scheme launches that cannot sustain operations.

Operational mechanics

During NFO

  • Scheme accepts subscriptions over NFO period (typically 15 to 30 days).
  • AMC tracks aggregate subscriptions.
  • Targets the minimum corpus.

If minimum met

  • Scheme launches.
  • Initial NAV computed.
  • Units allotted.

If minimum not met

  • Scheme does not launch.
  • Subscription amounts returned to investors.
  • Within stipulated SEBI timeline (typically 5 working days).
  • No interest paid on returned funds.

Recent context

For new AMC entrants (particularly under SEBI MF Lite framework ):

  • Lower minimums apply for passive-only schemes.
  • Reflects lower operational scale needed for passive operations.

For established AMCs:

  • Minimums easily met for flagship schemes.
  • Smaller / niche schemes may have tighter NFO subscription targets.

See also

External references

References

  1. SEBI (Mutual Funds) Regulations 1996.
  2. AMFI Best Practice Guidelines.

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The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

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