SEBI orders DGS Capital for ₹5 crore net worth shortfall

This is a final order by SEBI regarding DGS Capital Management Pvt. Ltd., a registered Portfolio Manager, concerning its failure to maintain the minimum required net worth, submit mandatory compliance reports, and ensure its Principal Officer obtained the required NISM certification during the period from January 2023 to December 2024.

Who it concerns: DGS Capital Management Pvt. Ltd. (PAN: AAFCD3473N, Registration No.: INP000004870) and its Principal Officer, Mr. Ashish Sharma.

What SEBI found or ordered

• SEBI found that DGS failed to maintain the minimum net worth of INR 5 crores required by the PM Regulations, with net worth noted at INR 1.64 crores (March 2023) and INR 1.6 crores (March 2024).
• SEBI found that DGS failed to submit required net worth certificates, compliance certificates, and corporate governance reports for FYs 2022-23 and 2023-24.
• SEBI found that the Principal Officer, Mr. Ashish Sharma, did not obtain the required NISM Series XXI-B certification by the deadline of September 07, 2023, obtaining it instead on October 14, 2024.
• An Interim Order dated February 17, 2025, directed DGS to meet net worth requirements within 15 days and prohibited it from onboarding new clients or accepting additional funds until compliant.
• The Noticee claimed to have increased paid-up share capital to meet the net worth requirement (revised net worth cited as INR 5,15,69,301) and submitted pending reports in February 2025.
• A hearing was conducted on June 03, 2025, where the Noticee argued it had complied with capital requirements after receiving the show cause notice.

Also in the document

• The order is a Final Order, indicating the conclusion of the examination process initiated in 2024.
• The net worth shortfall was significant, with the company holding approximately INR 1.6 crores against a requirement of INR 5 crores before the interim order.
• The Principal Officer's certification delay was over one year past the regulatory deadline.