With domestic mutual funds steadily increasing their footprint in listed Indian companies, markets regulator Securities and Exchange Board of India (Sebi) is exploring the creation of a common platform that would allow fund houses to jointly raise concerns on corporate governance lapses, weak financial performance and other shareholder-related issues.

The move comes as mutual funds emerge as increasingly influential shareholders in corporate India. Domestic mutual funds held 11.4 per cent of NSE-listed companies as of March 2026, with their ownership share rising consistently over the past six years.

Sebi has already put in place a stewardship code that requires institutional investors, including mutual funds and alternative investment funds (AIFs), to act as responsible fiduciaries by actively monitoring investee companies, voting on shareholder resolutions and safeguarding investor interests.

Under the framework, institutional investors are expected to define clear policies for intervention in investee companies. Such intervention may be triggered by concerns around poor financial performance, governance standards, executive remuneration, business strategy, ESG risks, leadership issues or litigation.

Against this backdrop, Sebi and the mutual fund industry have initiated discussions on whether multiple fund houses invested in the same company can collaborate through a common mechanism to engage with managements and seek information in the interest of shareholders.

“The rising ownership trend places mutual funds in a position to play an active role in ensuring better governance. We already have a stewardship code. One of the aspects of the code is having a mechanism for intervention in listed companies, including collaboration with other investors,” Amarjeet Singh, whole-time member of Sebi, said at an event organised by the Indian Chamber of Commerce on Saturday.

Confirming the development, Venkata Chalasani, chief executive of Association of Mutual Funds in India (AMFI), told The Telegraph that preliminary discussions with the regulator are already underway.

“Initial discussions have already taken place, and work is being done on this,” Chalasani said.

Separately, Singh said Sebi is also undertaking a comprehensive review of the regulatory framework governing Portfolio Management Services (PMS) in consultation with industry stakeholders.

The regulator is additionally in the consultation stage on issues related to donations, gifting and third-party payments in mutual funds as part of efforts to broaden investor participation and strengthen transparency in the sector.