How is Pledge-able Value Determined for Mutual Funds?

It’s based on the latest NAV (Net Asset Value) of your mutual fund and something called a haircut, a small percentage reduced to account for risk.

Here’s how it works:

Let’s say you hold 100 units of a fund, and the NAV is ₹20.
Total value = 100 × ₹20 = ₹2,000
If there’s a 10% haircut, ₹200 is deducted.
So, your pledge-able value is ₹1,800.

The riskier the fund, the higher the haircut, which means a lower margin.