Latest news with #AMCs
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Business Standard
6 hours ago
- Business
- Business Standard
Experts believe the tie-up could help resolve long-standing bottlenecks in KYC compliance, particularly in underserved regions
The Department of Posts (DoP) has partnered with the Association of Mutual Funds in India (Amfi) to provide Know Your Customer (KYC) verification services through its vast network of over 164,000 post offices across India. The agreement, signed on July 17, aims to streamline KYC compliance for approximately 241.3 million mutual fund folios, including 190.4 million equity, hybrid and solution-oriented schemes. 'This collaboration harnesses our extensive postal infrastructure to support financial inclusion and simplify KYC processes for investors nationwide,' said Manisha Bansal Badal, general manager (Business Development), Department of Posts. Why does this matter for investors? KYC compliance is mandatory for investing in mutual funds. Until now, offline investors had to visit asset management companies (AMCs) or registrar offices for document verification. Under this initiative, postal employees will assist investors in: Completing KYC forms Verifying and attesting self-attested documents Forwarding them to AMCs for processing 'This MoU marks a significant step in the industry's efforts to ensure regulatory compliance for investors residing in remote areas,' said VN Chalasani, chief executive, AMFI. Experts see a big boost for participation Financial experts say the tie-up could help resolve long-standing bottlenecks in KYC compliance, particularly in underserved regions. 'Enabling KYC at post offices is a strong move. In rural and semi-urban areas, trust matters more than tech, and post offices are trusted places. This will remove a key entry barrier for mutual fund investors in these regions,' said Navy Vijay Ramavat, managing director, Indira Group. 'For those whose KYC is stuck or rejected, this brings a much-needed physical touchpoint. Even in bigger cities, many people still struggle with digital-first norms. If executed well, this step can bring first-time investors into the fold, not just by simplifying KYC, but by making investing feel accessible, human, and local,' he added. Niranjan Babu Ramayanam, chief operating officer, Anand Rathi Wealth Limited, believes this partnership could be a game changer, 'As per industry sources, there are many clients who have invested in the past but have not updated their KYC as per the latest regulatory requirements. With the widespread presence of post offices across the country, this MoU will help AMCs reach such clients and assist them in updating their KYC to restart investments.' he said India added nearly 9.7 million new mutual fund investors in FY25. Experts say this initiative could unlock further growth, especially as Sebi's tightened KYC norms have left many investors unable to transact. 'This initiative will help resolve the KYC 'On Hold' or 'Rejected' statuses more efficiently, especially in rural areas where investors lack guidance to complete documentation,' said Ramayanam. 'There will be a substantial rise in SIPs from such investors once their KYC is validated.'
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Business Standard
9 hours ago
- Business
- Business Standard
Updating your mutual fund KYC? Post offices can now do it for you
The Department of Posts (DoP) has partnered with the Association of Mutual Funds in India (Amfi) to provide Know Your Customer (KYC) verification services through its vast network of over 164,000 post offices across India. The agreement, signed on July 17, aims to streamline KYC compliance for approximately 241.3 million mutual fund folios, including 190.4 million equity, hybrid and solution-oriented schemes. 'This collaboration harnesses our extensive postal infrastructure to support financial inclusion and simplify KYC processes for investors nationwide,' said Manisha Bansal Badal, general manager (Business Development), Department of Posts. Why does this matter for investors? KYC compliance is mandatory for investing in mutual funds. Until now, offline investors had to visit asset management companies (AMCs) or registrar offices for document verification. Under this initiative, postal employees will assist investors in: Completing KYC forms Verifying and attesting self-attested documents Forwarding them to AMCs for processing 'This MoU marks a significant step in the industry's efforts to ensure regulatory compliance for investors residing in remote areas,' said VN Chalasani, chief executive, AMFI. Experts see a big boost for participation Financial experts say the tie-up could help resolve long-standing bottlenecks in KYC compliance, particularly in underserved regions. 'Enabling KYC at post offices is a strong move. In rural and semi-urban areas, trust matters more than tech, and post offices are trusted places. This will remove a key entry barrier for mutual fund investors in these regions,' said Navy Vijay Ramavat, managing director, Indira Group. 'For those whose KYC is stuck or rejected, this brings a much-needed physical touchpoint. Even in bigger cities, many people still struggle with digital-first norms. If executed well, this step can bring first-time investors into the fold, not just by simplifying KYC, but by making investing feel accessible, human, and local,' he added. Niranjan Babu Ramayanam, chief operating officer, Anand Rathi Wealth Limited, believes this partnership could be a game changer, 'As per industry sources, there are many clients who have invested in the past but have not updated their KYC as per the latest regulatory requirements. With the widespread presence of post offices across the country, this MoU will help AMCs reach such clients and assist them in updating their KYC to restart investments.' he said What investors need to know? According to the Sebi's current guidelines, accepted documents for KYC include: Passport Driving licence Aadhaar card Voter ID NREGA job card (signed by a government officer) National Population Register letter How to check your KYC status? Visit any mutual fund website or registrar portal Enter your 10-digit PAN Check if your KYC status is: KYC Validated: Free to invest KYC Registered: Can invest in existing AMCs but may require fresh KYC for new ones KYC On-Hold/Rejected: Requires issue resolution A potential game changer for mutual funds India added nearly 9.7 million new mutual fund investors in FY25. Experts say this initiative could unlock further growth, especially as Sebi's tightened KYC norms have left many investors unable to transact. 'This initiative will help resolve the KYC 'On Hold' or 'Rejected' statuses more efficiently, especially in rural areas where investors lack guidance to complete documentation,' said Ramayanam. 'There will be a substantial rise in SIPs from such investors once their KYC is validated.' The agreement, effective for one year and renewable, includes strict confidentiality safeguards and Sebi compliance.
Mint
12 hours ago
- Business
- Mint
Expert view: Trump tariff risk is real; slowing GDP growth a key concern, says Krishnan V R of Marcellus
Expert view on Indian stock market: The risk of Trump tariffs is real, as the US is India's largest trading partner, and we currently run a large trade surplus with them in both goods and services, says Krishnan V R, Chief of Quantitative Research at Marcellus. In an interview with Mint, Krishnan shares his views on Indian stock market triggers, the potential impact of tariffs and his strategy for the US stock market at this juncture. Here are edited excerpts of the interview: GDP growth moderated last year, and the current estimate is for growth to be around 6-6.5 per cent this year and next. With core inflation trending around 3.5 per cent, I do not see much scope for aggregate revenues to grow at more than 12 per cent for most domestically facing businesses. We remain cautious about mass consumption given India's inability to create jobs at scale and stretched household balance sheets. However, an easing inflation backdrop coupled with additional supportive monetary and fiscal policy steps could trigger a near-term recovery in urban consumption. Slowing GDP growth and lower inflation do not bode well for corporate earnings growth. Q1FY26 also saw tariff announcements and the rise of geopolitical risks. I think we need to wait for a material uptick in income growth for a broad-based consumption recovery, as I do not see any additional structural triggers apart from the tailwinds highlighted above. The tariff risk is real, as the US is India's largest trading partner. We currently have a large trade surplus with the US in both merchandise goods and services. It is clear that the US administration intends to use the threat of tariffs and associated uncertainty as a tool for trade negotiations. Given that the US will demand meaningful concessions for Indian market access in case there is a trade agreement, it would be fair to expect that our trade surplus with them might shrink in the near term. However, India's relative tariff levels and export competitiveness compared to other countries will determine the long-term impact of tariffs on its overall goods trade deficit. Firstly, steady and growing domestic flows predominantly through mutual funds, despite a brief drawdown between Sept-2024 and Feb-2025, have been a stabilising factor for equity markets in the face of erratic FII flows. Secondly, domestic mutual funds and retail investors have been net buyers of equity over the last few years, even as foreign investors and promoters have been reducing their stakes. From an investing standpoint, this reallocation of household savings to financial assets offers opportunities to pick well-run companies in broader financial services space like insurance, wealth management, RTAs, depositories, AMCs, among others, which stand to benefit in the long term. According to our global equities team, broad-based index exposure calls for caution at this juncture, and a more selective, bottom-up approach is warranted. Many high-quality businesses are currently lagging—not because of fundamentals, but due to a lack of near-term earnings triggers. On the other hand, companies benefiting from recent tailwinds may be pricing in overly optimistic assumptions. In such an environment, valuation discipline and thoughtful stock selection become critical. For patient investors, this setup also creates a fertile hunting ground—several high-quality, under-the-radar businesses trading at attractive valuations can offer meaningful long-term upside. While US stagflation concerns are valid, they have not been borne out in reality, at least not yet. US jobs data, indicated by non-farm payrolls, surprised positively in May and June. However, the combination of a cheaper US dollar and higher long-term USD yields would suggest some nervousness about holding dollar assets. If US recession risks do play out, then it will obviously have knock-on effects on EM (emerging market) economies, especially those where trade and exports are a meaningful portion of GDP. For India, domestic consumption is more important, and hence, the first-order impact of the US slowdown on the Indian economy will be relatively less. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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Business Standard
16 hours ago
- Business
- Business Standard
Sebi's AMC-family office plan sparks concerns over regulation and parity
Sebi's plan to let AMCs manage non-broad-based pooled funds without PMS licences has sparked debate over regulatory parity, competitive fairness, and market safeguards New Delhi The Securities and Exchange Board of India's (Sebi's) recent proposal to permit asset management companies (AMCs) to manage family office funds has stirred debate, with concerns surfacing around regulatory overlap and market parity. On July 7, Sebi released a consultation paper suggesting major relaxations to existing regulations. The key proposal includes allowing AMCs to manage non-broad-based pooled funds—such as family offices and certain offshore vehicles—without obtaining a separate portfolio management services (PMS) licence, provided strict checks and balances are implemented. 'If AMCs are allowed to offer segregated mandates to large clients under a new category, the lines between PMS and mutual funds (MFs) will blur further. This raises regulatory parity questions,' said Sonam Srivastava, founder and fund manager at Wright Research PMS. She argued that PMS managers operate under stricter minimum investment thresholds, compliance costs, and client suitability obligations. 'If AMCs are allowed to offer similar services under the MF umbrella but with lighter-touch regulation or brand-driven advantages, it could lead to competitive imbalance and arbitrage,' she added. Uneven playing field and a new revenue stream Until now, AMCs interested in offering management and advisory services to such funds were required to hold a PMS licence, a layer of regulation the AMC sector contended created an uneven playing field compared to other intermediaries. Sebi's latest proposal opens up a new revenue stream for the domestic mutual fund industry, which handles assets worth Rs 75 trillion. 'The proposals could enable AMCs to engage with a wider spectrum of pooled vehicles which are non-broad-based, such as family offices or select offshore funds, which were earlier outside the regulatory scope,' said Swarup Mohanty, vice-chairman and chief executive officer, Mirae Asset Investment Managers (India). Safeguards, definitions and structural implications Under the proposal, non-broad-based funds are defined as those with fewer than 20 investors, or where a single investor holds more than 25 per cent of the corpus. Sebi has outlined safeguards to address potential conflicts of interest, including caps on fee differentials, resource allocation norms, and clear firewalls between mutual fund and private mandates. Pradeep Gupta, executive director and head of investments at Lighthouse Canton India, said a new set of investors would benefit from an experienced and well-resourced buy-side investment architecture that has proven itself across multiple market cycles. Market structure, HNIs and the competitive landscape A recent Jefferies report indicated that the high-net-worth investor (HNI) segment is already crowded, with revenue streams layered through various commissions and fees. Professional wealth managers now oversee assets exceeding Rs 65 trillion, and the space is witnessing strong competitive momentum for deepening service offerings. The report noted a likely trend towards advisory-led models as wealth managers look to tap larger-ticket clients. Despite concerns over increased competition, several PMS managers believe their established expertise in serving ultra-HNI requirements will remain a key differentiator. Divam Sharma, co-founder and fund manager at Green Portfolio PMS, said AMCs entering this space will heighten overall competition, but will also be subject to tighter controls on fees and operations. 'We've already built the systems and expertise needed for personalised, complex wealth solutions, so most family offices will continue to seek out hands-on, bespoke service,' he added. To allay concerns, Sebi has proposed permitting ancillary activities for AMCs, including fund distribution and global marketing. Public comments on the consultation paper are open until July 28, with market participants expecting a final framework before the end of the year.
Economic Times
18 hours ago
- Business
- Economic Times
SIP boom & market rally push AMCs into spotlight: 4 Analyst-backed stocks to watch
iStock Experts note that AMCs are likely to face the least regulatory risks within the non-lending financial space. Should you buy a mutual fund (MF) scheme's unit or its Asset Management Company's (AMC) equity share? This question may well be asked by many when ICICI Prudential AMC, India's second largest fund house with assets under management (AUM) worth Rs.10.3 lakh crore (at the end of June 2025), gets listed. The fund house has recently filed its papers to go public. The AMC is planning an offer for sale of 1.76 crore equity shares, where the foreign JV partner, Prudential Corporation Holdings, will offload around 10% of its stake. But what can investors gain from buying an AMC's shares, as opposed to its well-performing schemes that can diversify your money across multiple asset classes? How an AMC makes money? A fund house earns through the asset management fees it collects from investors for running the MF schemes. The AMC fees are a part of the total expense ratios (TERs) that fund houses deduct from their schemes' net asset values. The TER consists not just of AMC fees, but also comprises other charges like distributor commission, registrar and transfer fees, auditor fees, and so on. TERs vary from scheme to scheme; equity funds tend to charge higher TER (and by virtue earn more for the AMCs) than debt funds. The TER, and therefore the AMC fees, is charged as a percentage of Garg, Partner and Fund Manager at INVasset, PMS, explains that the AMC companies benefit from operating leverage as the AUM grows, and the fee income scales up. With minimal capital requirement and low fixed costs, most of the incremental revenue flows directly to the bottom line, resulting in a high return on equity (RoE). Share of equity AUM has jumped over last 10 years Equity-led growth drives profits. The revenues and the profitability of these companies are closely tied to market movements and investor sentiment. Bullish market cycles drive AUM growth via NAV appreciation and fresh inflows, especially through SIPs. Conversely, bearish phases lead to redemptions and stagnant or declining corrections of 8.3% and 0.9% in the December 2024 and March 2025 quarters, respectively, the domestic equity benchmark, Nifty 50, bounced back by 10% in the first quarter of 2025-26 (or the June quarter). AMCs are likely to be a beneficiary of the rebound in the equity market and are expected to report a strong performance in the June 2025 quarter. Costs down,markets volatile The jump in equity markets could be a positive trigger for AMC stocks. The June quarter delivered strong results. Aided by the equity market rally, mutual fund industry AUM grew 13.2% quarter-on-quarter, while SIP inflows rose 2.9% to `80,539 crore. A decline in discontinued SIPs versus new registrations (for the second straight month in June 2025), along with a steady rise in folios, signals robust retail participation and adds momentum to the industry's are optimistic about the long-term growth prospects of mutual funds. A recent report by Antique Stock Broking suggests that AMC stocks are poised for a re-rating, backed by improving RoEs, strong operating cash flows, low capex requirements, and steady earnings. The report projects a 20% compounded annual growth in active fund AUM over the medium SIP flows and the untapped mutual fund potential in both T30 (Top 30 cities) and beyond, driven by fintech expansion, are expected to bolster AMC revenues. A possible rise in discretionary income following tax cuts, along with improved liquidity from repo rate reductions, could further accelerate equity Bathini, Equity Strategist, WealthMills Securities, says that the mutual fund investing culture is becoming stronger day by day in India with penetration into semi-urban and rural areas. This trend is expected to outpace the AUMs of AMCs in the coming years. Party spoilers Experts, however, advise investors to consider the risks involved. 'AMCs are marketlinked businesses—prolonged corrections can dampen flows and hurt profitability,' adds Garg.A key challenge facing the AMC industry is the persistent pressure to cut costs. TERs have steadily declined over the years. The latest review of TERs by the markets regulator Securities and Exchange Board of India (Sebi), proposed in May 2023, remains in limbo and, according to market chatter, is unlikely to materialise. The proposal marks the most significant overhaul since the 2018 Antique Stock Broking report expects that AMCs are likely to face the least regulatory risks within the non-lending financial space as most major regulations regarding the telescopic nature of TERs are already implemented. However, the report also asserts that any changes to the TER cap, benchmarking norms, or distributor incentive rules can squeeze margins or require abrupt business model June 2025 quarter preview report from Prabhudas Lilladher also points to higher operating expenditures on a sequential basis as a risk that might impact performance. AMC heavyweights The optimism is visible in the returns generated by the biggest four listed AMC players: UTI AMC, HDFC AMC, Aditya Birla SunLife AMC and Nippon Life India AMC. The group of these four companies generated an equal-weighted average return of 37.9% compared to the 8.8% and 11.3% returns by the Nifty 50 and Nifty 500 indices between 1 April 2025 and 11 July 2025. Here is how the four listed AMC players are placed. Nippon Life India AMC Expected first quarter 2025-26 revenue growth of 18.7% and Profit After Tax (PAT) growth of 6.4% year-on-year as per analyst consensus. Strong AUM growth and declining operating expenses driving performance. Gaining market share through better scheme performance, distributor engagement , and rising SIP flows, according to ICICI Securities report. Strong passive investing position with ETFs at 28% of total AUM. Distributor commission rationalisation in 2024-25 expected to boost future yields, according to Antique Stock Broking report. Key strengths: Strong brand, parent backing, robust equity franchise, high operating leverage, and digital focus. Aditya Birla Sun Life AMC Expected June quarter 2025-26 revenue growth of 15.3% and PAT growth of 12.5% year-on-year per as per Centrum Broking. Enhancing direct channel sourcing and expanding to 543 locations (from current 300), according to a ICICI Securities report. Expanding alternate business (AIF/PMS) and offshore operations to boost profitability. Focusing on debt fund investor awareness given strong market share in this segment. HDFC AMC Revenue and PAT growth in June 2025 quarter: 24.9% and 23.8% year-on-year respectively. Gaining market share through stable positioning, enhanced fund management team, and strong product performance driving new customer acquisitions. Strengthened prospects via retail focus, wider distribution network, and smaller city expansion. Alternative business (PMS, AIF, private credit) and global expansion through GIFT City expected to drive growth. UTI AMC Expected first quarter 2025-26 revenue growth of 5% but PAT decline of 31.3% due to lower other income, as per Prabhudas Lilladher Net equity inflows declined in 2024-25, but targeted fund launches and improved performance reviving equity flows. Efficient cost management with 8% operating expenditure on compounded basis (FY21-25) vs peers' 11-14%. Positive outlook driven by improving scheme performance, growing retail/SIP franchise, passive segment pickup, low cost escalations, and attractive valuations.
