Hi @aemInfyuser,
AEM DAM fully supports SVG files. After uploading an SVG file, authors can then choose SVG files during content creation.
The SVG file might be exported in the wrong way, where there are many different options for this exporting for an SVG asset. If the SVG is exported from illustrator, be sure to check out this blog, How To Export SVGs For The Web From Illustrator.