Sebi Directs AIF Managers to Upload ISIN-Wise NAVs to Depositories
The Securities and Exchange Board of India (Sebi) has issued a fresh directive on February 6, 2026, requiring Alternative Investment Funds (AIFs) to transmit International Securities Identification Number (ISIN)-wise Net Asset Values (NAVs) to depositories. Industry experts have described the move as an inevitable “compliance checkbox” following the earlier demat mandate.
Under the circular, AIF managers must submit the latest NAV for each unit to the National Securities Depository Ltd (NSDL) and Central Depository Services (India) (CDSL), via their Registrars and Transfer Agents (RTAs). The deadline is May 1, 2026, or within 30 days from the portfolio valuation date, whichever is later.
Completing the ‘Unfinished Plumbing’ of Demat Reform
Industry leaders argue that this move merely completes what began with Sebi’s 2023 demat mandate, which required AIF units to be issued in dematerialised form by October 2024. While most AIF units now sit in NSDL and CDSL ledgers, NAV values were not displayed in Consolidated Account Statements (CAS).
Pre-circular, AIF holdings appeared in CAS only as “X units held” without rupee valuation. In contrast, equities, mutual funds and bonds were displayed with marked-to-market values. This left a data gap in investor reporting.
Girish Sankar, Chief Strategy Officer at Computer Age Management Services (CAMS), said:
“This circular was inevitable. Once demat happened, NAV upload was unavoidable. It’s Sebi completing unfinished plumbing.”
CAMS services over 90 percent of AIFs, making it a key operational stakeholder in the transition.
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How the NAV Upload Mechanism Will Work
The circular mandates that NAV uploads be done per ISIN, the unique 12-character code representing a specific scheme or class of units. AIF managers will calculate NAV under existing AIF Regulations, 2012 norms, and transmit the data to RTAs, who will then feed it into depository systems via APIs or portals.
Valuation frequencies vary by category:
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Category I & II AIFs: Semi-annual valuation by independent valuers under IBBI or IPEV standards.
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Category III AIFs: Quarterly, monthly, or even daily valuation for liquid hedge strategies.
Experts emphasise that this does not change how NAVs are computed, only how they are transmitted.
Depositories to Display NAV with Mandatory Disclaimer
Sebi has directed depositories to display NAV values with a mandatory disclaimer stating that the value is based on the AIF’s valuation methodology and accounting practices. Investors are advised to refer to the AIF’s valuation policy and disclosures.
This disclaimer acknowledges the bespoke nature of AIFs.
Unlike mutual funds with standardized daily NAVs, AIF valuations are:
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Investor-specific
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Waterfall-driven
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Subject to carried interest (typically 20%)
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Influenced by hurdle rates and catch-up clauses
An industry expert explained:
“Two investors in the same ISIN can have different NAVs due to drawdowns, equalisation credits, or entry timing. Depositories operate at class level, so CAS may show aggregated NAV, which could differ from the fund’s authoritative Statement of Value.”
No Scandal, Just Regulatory Housekeeping
Importantly, experts clarified that the circular was not triggered by valuation scandals or systemic complaints. There were no widespread NAV delays or enforcement actions.
Sebi’s rationale appears administrative — leveraging depository infrastructure for enhanced transparency and operational efficiency, while centralising AIF data aggregation.
For privately placed AIFs, capped at 1,000 investors, NAV disclosures were already provided directly to investors and regulators. The primary benefit of the upload mandate lies in CAS completeness and regulatory oversight, rather than investor protection per se.
Operational Challenges and Industry Feedback
The industry broadly considers the 30-day reporting window comfortable. However, experts flagged operational complexities:
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Multi-class structures may require dozens of ISIN uploads.
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Corporate actions such as unit credits remain partially manual.
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Decimal or input errors could pose risks without bulk upload APIs.
An executive noted:
“The challenge lies in declaring NAV within that timeframe, especially for unlisted assets valued semi-annually.”
The industry has requested bulk file uploads or enhanced API support from depositories to reduce manual effort and potential errors.
What Impact Will This Have on Investors and Markets?
For investors, the immediate impact is improved visibility in Consolidated Account Statements. AIF holdings will now reflect rupee values alongside equities and mutual funds, offering a more holistic portfolio snapshot.
However, experts caution that CAS figures may not perfectly match final payout calculations at redemption due to investor-specific waterfalls and pass-through taxation structures.
From a market perspective, the circular enhances data standardisation across a ₹5 lakh crore AIF industry that has grown 30 percent year-on-year. While not transformative, it strengthens operational discipline and transparency.
Here’s What Happened and Why the Industry Reacted Calmly
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Sebi mandated ISIN-wise NAV uploads to NSDL and CDSL.
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Deadline set for May 1, 2026 or 30 days post valuation.
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Depositories to display NAV with disclaimers.
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Industry termed it regulatory housekeeping rather than reform.
The consensus view: this is not a governance overhaul but a logical extension of the 2023 demat mandate.
The Road Ahead for India’s Alternative Investment Industry
With AIF assets crossing ₹5 lakh crore and expanding rapidly, regulatory alignment with depository systems was only a matter of time.
As one expert summed it up:
“It’s like stopping the waterfall one level early — less precise, but directionally correct.”
In essence, Sebi’s NAV upload mandate represents a structural clean-up in the evolving alternative investment ecosystem — not a disruption, but a completion of unfinished regulatory plumbing.
