Samco receives final approval from Sebi to start its MF business

Indian Mutual Fund (MF) industry which has seen substantial growth in the last few years has started attracting new players in its fold. Samco Securities has received final approval from Securities and Exchange Board of India (Sebi) for setting up MF in India.

Samco, which is an online discount stock broker, will be the 45th player in the Rs 33-trillion MF industry. Founder Director Jimeet Modi of Samco Asset Management Pvt Ltd said in the press statement stated, “The Mutual funds space is ripe for disruption with a massive opportunity to create huge value for investors and we at SAMCO are focussed on building a technology driven investor-first and investor-centric company to deliver value to millions of Indian retail investors.”

According to Sebi, as on June 2021, there are around seven entities waiting to get in-principle approval from the market regulator. Some of the players include, Zerodha Broking Limited, Bajaj Finserv Limited, Alchemy Capital Management Private Limited and Helios Capital Management PTE Limited among others.

Recently, NJ India which is India’s largest distributor received approval from the Sebi to start its own MF business. Umeshkumar Mehta, CEO of Samco Asset Management Pvt Ltd said, “We have a great team in place which is capable of creating a distinct mark in this highly competitive industry. Since now the team is in place we will launch our first NFO within the mandatory six months period. We have Financial industry veterans who will guide us to make Samco as one of the most desired Mutual Funds to invest with.”

Some of the new applications follow Sebi’s move last year to ease the profitability criteria for setting up an asset management company (AMC). In December, Sebi said sponsors which don’t fulfill the profitability track record can still set up a fund house, provided they have a minimum net-worth of Rs 100 crore, instead of Rs 50 crore that is otherwise required.

Despite being a 44-player industry, most of the assets are cornered by the top 10 fund houses. However, there is huge scope for expanding the business as penetration of MF still remains low in India.

According to a report by ICICI Securities, India’s AUM has recorded a strong 19 per cent annualised growth over the past 20 years. Yet, the AUM forms only 12 per cent of GDP, compared to the global average of 55 per cent.

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