Mutual Fund News for July 2026

Sebi Board Approves Open-Market Share Buybacks and SDI Norms Update

The Securities and Exchange Board of India (Sebi) has reintroduced open-market buybacks via stock exchanges, following adjustments to the taxation framework. The move complements the tender-offer route and aligns the process with Companies Act regulations. Buybacks must be completed within 66 working days, with at least 40% of funds used in the first half, and safeguards such as promoter share freezes are in place.

In addition, Sebi amended the Securitised Debt Instruments (SDI) and Security Receipts regulations to align with the Reserve Bank of India’s securitisation framework. The board also eased intraday borrowing rules for mutual funds and expedited approvals for Alternative Investment Funds, streamlining operations and promoting efficiency. These measures aim to strengthen investor protection while enhancing market transparency and liquidity.

Active Funds Favoured Over Index Funds for Long-Term Goals

Investors planning for long-term financial objectives are being advised to consider actively managed mutual funds over passive index funds. While passive funds offer low-cost market exposure, active strategies may provide better risk-adjusted returns in volatile markets.

Ashish, a 37-year-old investor from Bengaluru, currently invests Rs. 78,000 monthly through SIPs across various mutual funds, including Motilal Oswal Nifty 500 Momentum 50, SBI Small Cap Fund, SBI Contra Fund, Parag Parikh Flexi Cap Fund, Kotak Emerging Equity Fund, and Canara Robeco Bluechip Equity Fund. With a target corpus of Rs. 7 crore over 12 years for his daughter, experts recommend step-up SIPs of 10% annually and portfolio diversification across active funds to achieve long-term wealth creation goals.

Credit Guarantee Scheme for MFIs Extended to Boost Lending

The Finance Ministry has extended the Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0) by two months, now valid until August 31 or until guarantees of Rs. 20,000 crore are issued, whichever occurs first. The maximum loan amount cap for large NBFC-MFIs has been increased from Rs. 300 crore to Rs. 1,000 crore, subject to 20% of Assets under Management.

Introduced on March 20, 2026, the scheme provides guarantee cover to banks and financial institutions via the National Credit Guarantee Trustee Company Limited (NCGTC) for loans extended to microfinance institutions serving small borrowers. To date, Rs. 770 crore has been sanctioned. The guarantee covers 80% for small, 75% for medium, and 70% for large NBFC-MFIs, with a 0.5% annual guarantee fee applicable. The move aims to facilitate increased credit flow and better utilisation of the scheme, supporting the sector’s recovery and growth.

Sebi Fines Suzlon Energy Rs. 29 Crore Over Financial Misstatements

The Securities and Exchange Board of India (Sebi) has levied penalties totaling Rs. 28.95 crore on Suzlon Energy, its MD Vinod R. Tanti, promoter Girish R. Tanti, and other executives for allegedly misrepresenting the company’s financial disclosures over several years.

Sebi’s 96-page order found that the company’s financial statements failed to present a true view of profitability, net worth, leverage, financial exposure, and risk profile. The fines include Rs. 15.95 crore on Suzlon Energy, Rs. 5.75 crore on Vinod R. Tanti, Rs. 5.45 crore on Girish R. Tanti, Rs. 1.5 crore on former CFO Kirti J. Vagadia, and Rs. 30 lakh on Amit Agarwal. The case followed an anonymous complaint in December 2019 and subsequent forensic audits, with Sebi overriding a prior adjudicating officer decision that had dismissed the penalties.

Sebi Simplifies Transfer Process for Deceased Investors’ Shares

Securities and Exchange Board of India (Sebi) has introduced streamlined procedures for transferring securities in the name of deceased investors to their legal heirs and claimants. The regulator has set thresholds for small-value claims, with physical shares capped at Rs. 10,000 per scrip and demat holdings at Rs. 30,000.

The board also increased the small-value claim limits to Rs. 10 lakh for physical shares and Rs. 30 lakh for demat shares. Sebi removed the need for separate affidavits and NOCs, allowing a combined affidavit-cum-NOC. Death certificates with QR codes are now accepted alongside originals or attested copies. These reforms aim to reduce procedural requirements, improve transparency, and simplify intra-day borrowing for mutual funds. The open-market buyback mechanism has also been reintroduced, ensuring more flexibility for fund houses.

Tata AIA Life Introduces Multifactor ULIP for Low-Volatility Investing

Tata AIA Life Insurance has launched the Tata AIA Multifactor Index Fund, a new ULIP based on the customised Nifty 500 Multifactor MQVLv 50 Index. The fund selects 50 companies from the Nifty 500 universe using factors such as low volatility, quality, value, and momentum.

Designed for investors seeking stable returns in volatile markets, the ULIP focuses on low-volatility stocks to minimize fluctuations while participating in equity market growth. The fund aims to offer a resilient investment journey for long-term wealth creation, catering to clients who prefer steady performance without compromising exposure to India’s equity opportunities. The launch reinforces Tata AIA’s commitment to innovative, market-aligned products.

HDFC Mutual Fund Launches Nifty Auto Index Fund to Capture Automobile Sector Growth

HDFC Mutual Fund has introduced the HDFC Nifty Auto Index Fund, an open-ended scheme designed to offer investors exposure to India’s automobile and auto ancillary sector via a passive investment strategy. The new fund offer (NFO) opened for subscription and is set to close on July 3, 2026. The scheme will reopen for continuous sale and repurchase within five working days from the date of allotment of units under the NFO.

The fund will invest in the constituents of the Nifty Auto Index (Total Return Index), which includes 15 leading companies from the Nifty 500 universe. These stocks span passenger vehicles, two-wheelers, commercial vehicles, auto components, and other related segments. The index is structured to reflect the overall performance of the automobile sector, which remains a key pillar of India’s economic growth, manufacturing expansion, employment generation, and export competitiveness. This offering allows investors to participate systematically in the auto sector’s long-term growth trajectory.

Tata Mutual Fund Rolls Out Multi-Sector Passive Fund of Funds

Tata Mutual Fund has launched the Tata Multi-sector Passive Fund of Fund (FoF), an open-ended scheme investing in units of passive equity mutual funds across multiple sectors. The NFO for the fund is open for subscription until July 6, 2026, with continuous sale and repurchase starting from July 14. The scheme aims to generate long-term capital appreciation by actively allocating investments across sector-oriented funds and ETFs based on fund manager assessments.

The FoF employs a momentum-based allocation strategy, assessing recent sector performance and adjusting for volatility to favor sectors with stronger and more stable trends. Portfolio allocations are guided by macroeconomic conditions, sector outlook, and historical momentum, with higher weights assigned to sectors exhibiting robust growth.

Anand Vardarajan, Chief Business Officer at Tata Asset Management, stated that the fund provides a disciplined, rules-based framework for diversification across sectors, reducing emotional bias and minimizing the challenges of timing market cycles while enhancing long-term wealth creation.