SEBI has granted approval to Carnelian Asset Management & Advisors Pvt Ltd to launch its mutual fund business, allowing the Mumbai-based investment firm to directly compete for retail investor money. The licence enables Carnelian to offer active and passive schemes across equity, debt, and hybrid categories, expanding its reach beyond high-net-worth individuals into India’s mass retail savings market. The approval comes at a time when the Indian mutual fund industry’s total assets under management have crossed ₹82 lakh crore, with over 20 crore investor folios.
What SEBI Approved
The Securities and Exchange Board of India (SEBI), the country’s capital markets regulator, issued registration number MF/094/26/20 to Carnelian Asset Management & Advisors Pvt Ltd, authorising it to operate as a mutual fund. SEBI was established as a non-statutory body on April 12, 1988, and was given statutory powers through the SEBI Act, 1992. It is headquartered in Mumbai and functions under the Ministry of Finance.
With this approval, Carnelian becomes one of the newer entrants in India’s mutual fund space. The firm can now launch schemes across multiple categories, including actively managed equity funds, passive index funds and exchange-traded funds, debt funds, and hybrid funds that mix equity and fixed income. Before this licence, Carnelian’s investment products were limited to Portfolio Management Services (PMS), Alternative Investment Funds (AIFs), and offshore strategies, which cater primarily to wealthy individuals and institutional investors. The mutual fund licence opens the door to the mass retail market, where minimum investment amounts can be as low as ₹500 through systematic investment plans.
Carnelian Asset Management: Background and Growth
Carnelian Asset Management was founded in 2019 by Vikas Khemani, Manoj Bahety, and Swati Khemani. Vikas Khemani, who serves as Founder and Chief Investment Officer, is a Chartered Accountant and CFA charter holder with about 27 years of experience in capital markets. Before starting Carnelian, he spent 17 years at Edelweiss Securities Ltd, where he served as CEO and built businesses in institutional equities, investment banking, and equity research.
The firm started as a boutique investment manager focused on high-conviction, research-driven investing. Its approach combines structural growth analysis, management quality assessment, valuation discipline, and forensic accounting checks before taking investment positions. Over seven years, Carnelian has grown its assets under management to over ₹18,300 crore as of June 30, 2026. The firm serves more than 8,600 clients through a distribution network of over 710 partners.
With the mutual fund licence, Carnelian can now tap into India’s growing base of retail investors, many of whom are first-time entrants to the formal financial system. Khemani has said the company sees its next phase of growth being driven by deeper penetration beyond major metropolitan centres into smaller towns and rural India.
The Regulatory Framework for Mutual Funds
Mutual funds in India operate under the oversight of SEBI, which notified a comprehensive new regulatory framework, the SEBI (Mutual Funds) Regulations, 2026, effective from April 1, 2026. These regulations replaced the earlier SEBI (Mutual Funds) Regulations, 1996, which had governed the industry for three decades.
The 2026 regulations introduced several landmark changes. They created three categories of mutual funds: regular mutual funds, a new Mutual Fund Lite (MF Lite) framework for passive-only fund houses, and Specialized Investment Funds (SIFs) for sophisticated investors with a minimum investment threshold of ₹10 lakh. They also introduced a two-route sponsor registration system, where new entrants without a five-year profitability track record can still enter the industry by bringing stronger capital (₹150 crore) and an experienced team. For the first time, private equity funds can sponsor mutual funds under this framework.
The Structure of a Mutual Fund
A mutual fund in India is set up as a trust, with three key constituents. The sponsor is the entity that establishes the mutual fund. The trustees hold the fund’s assets in trust for the benefit of unitholders. The Asset Management Company (AMC) manages the fund’s investments and operations. A custodian holds the securities safely, while a registrar and transfer agent handles investor transactions and record-keeping.
The Association of Mutual Funds in India (AMFI), incorporated on August 22, 1995, is the industry body representing all SEBI-registered asset management companies. Headquartered in Mumbai, AMFI promotes ethical standards, investor education, and industry development. Before launching any scheme, an AMC must file a scheme information document with SEBI, disclosing investment objectives, asset allocation, expense ratios, and risk factors.
Distinction from PMS and AIFs
Carnelian’s existing PMS and AIF businesses differ fundamentally from mutual funds. PMS involves a dedicated portfolio manager managing a customised portfolio for a client, typically requiring a minimum investment of ₹50 lakh. AIFs are pooled investment vehicles for sophisticated investors, with a minimum investment of ₹1 crore. Mutual funds, by contrast, can accept investments as low as ₹500 through SIPs, making them accessible to the broadest section of retail investors. PMS and AIFs are also regulated under separate SEBI regulations, not the Mutual Funds Regulations.
India’s Growing Mutual Fund Industry
The Indian mutual fund industry has seen remarkable expansion in recent years. The industry’s total Assets Under Management (AUM) grew from ₹33.67 lakh crore in June 2021 to ₹82.22 lakh crore in June 2026, nearly a threefold increase in five years. The number of investor folios has crossed 20 crore, and active Systematic Investment Plan (SIP) accounts stand at about 10 crore.
| Metric | Value |
|---|---|
| Industry AUM (June 2026) | ₹82.22 lakh crore |
| Number of folios | Over 20 crore |
| Active SIP accounts | About 10 crore |
| Number of registered AMCs | Over 44 |
This growth has been driven by rising financial literacy, digital onboarding platforms, the spread of SIP culture, and increasing participation from smaller towns. The government and SEBI have taken several steps to deepen market participation, including simplifying the know-your-customer process, promoting direct plans that reduce costs for investors, and tightening regulations to protect unitholder interests.
What This Means for Retail Investors
Carnelian’s entry into mutual funds adds one more option for retail investors. The firm plans to bring its research-intensive, forensic-driven investment style to mutual fund products. For investors, the key distinction will be whether Carnelian’s active funds can deliver returns that justify their expense ratios compared to low-cost passive alternatives. The firm will also need to build brand recognition and distribution reach in a market dominated by large, established players such as SBI Mutual Fund, ICICI Prudential Mutual Fund, and HDFC Mutual Fund, which together manage a significant share of the industry’s AUM.
Key Takeaways
- SEBI granted mutual fund registration to Carnelian Asset Management & Advisors Pvt Ltd (registration number MF/094/26/20), allowing it to offer retail mutual fund schemes.
- Carnelian manages over ₹18,300 crore in assets across PMS, AIF, and offshore strategies and serves more than 8,600 clients.
- The firm was founded in 2019 by Vikas Khemani, a former CEO of Edelweiss Securities, along with Manoj Bahety and Swati Khemani.
- The Indian mutual fund industry’s total AUM reached ₹82.22 lakh crore in June 2026, with over 20 crore folios and about 10 crore active SIP accounts.
- SEBI, established on April 12, 1988, gained statutory status through the SEBI Act, 1992, and is headquartered in Mumbai.
- The AMFI, incorporated on August 22, 1995, is the industry body representing all SEBI-registered asset management companies in India.
