Page 15 - Banking Finance July 2025

MUTUAL FUND

However, IAs and RAs raised concerns a striking 24% CAGR over the last five Deepak Shenoy, has filed its first draft
over inconsistent implementation of years, according to Franklin Templeton offer document with SEBI for the
third-party FD procedures and chal- India Mutual Fund. As of May 2025, the launch of Capitalmind Flexi Cap Fund.
lenges in lien marking. Responding to industry's AUM reached a record Rs This will be an open-ended equity
these issues, Sebi has now permitted 72.2 lakh crore, marking an annual scheme with the flexibility to invest
units of liquid or overnight mutual addition of Rs 13.3 lakh crore. across large-cap, mid-cap, and small-
funds, lien-marked in favour of ASB, as
In comparison, US mutual fund assets cap segments.
valid instruments. This flexibility aims
grew at a more modest 8% CAGR over The scheme's objective is long-term
to simplify regulatory adherence and
the past decade. The Indian MF sector
enhance ease of doing business for has emerged as a counterweight to capital appreciation through diversi-
market intermediaries, offering more foreign institutional investor (FII) move- fied equity exposure and will be
practical options for maintaining regu- ments, with domestic institutional in- benchmarked against the NIFTY 500
latory deposits. vestors (DIIs) netting Rs 6 lakh crore in TRI.
The measure is expected to reduce the past year despite Rs 3.1 lakh crore Managed by Anoop Vijaykumar, the
procedural friction and better align FPI outflows. fund will offer both regular and direct
with the dynamic investment practices plans with a growth option. An exit
MF AUM now stands at 31% of bank
of professionals in the advisory ecosys- deposits, tripling from 12.6% in 2015. load of 1% will apply if units are re-
tem. Moreover, investor participation from deemed within 12 months; beyond
B15 and B30 cities has risen steadily, that, no exit load will be charged.
Indian MF Industry Deliv- indicating deepening retail penetration
ers 20% CAGR Growth across India. Wealth Managers, AIFs Eye

Over a Decade: Franklin Mutual Fund Entry Amid
Capitalmind MF Files for
Templeton SEBI's SIF Push
First Fund; Flexi Cap
India's mutual fund industry has expe- India's mutual fund landscape is wit-
rienced robust expansion, clocking a Scheme in the Works nessing heightened interest from alter-
20% CAGR over the past 10 years and Capitalmind Mutual Fund, founded by
native investment funds (AIFs) and
wealth managers as SEBI encourages
Global Tensions Drag Equity MF Inflows Down 22% the entry of new players through its
in May Special Incentive Framework (SIF).
As of March 31, 2025, five entities-
Net inflows into equity mutual funds in India dropped sharply by 21.66%
month-on-month to Rs 19,013 crore in May 2025 from Rs 24,269 crore in AlphaGrep Securities, Monarch
April, impacted by global market volatility and geopolitical tensions, includ- Networth Capital, Marcellus Invest-
ing India's Operation Sindoor. ment Managers, Wealth First Portfolio
Managers, and Nuvama Wealth-have
Compared to May 2024, the decline was a steeper 45.20%. Net inflows into
domestic ETFs (excluding gold ETFs) also plunged 78.55% month-on-month, pending in-principle approvals.
following a record Rs 19,057 crore in April. Despite the short-term decline, AlphaGrep has already received SEBI's
overall industry AUM grew by 22.55% year-on-year to Rs 72.2 trillion in May initial nod.
2025. Earlier, firms like Jio Financial Services,
Open-ended growth and equity-oriented schemes posted the highest YoY Blackrock, Pantomath Capital, and
AUM growth at 26.21%, followed by other open-ended schemes (24.45%) Capitalmind Financial Services were
and hybrid schemes (22.12%). These trends, highlighted by AMFI and ICRA granted licenses, with final registration
Analytics, indicate temporary investor caution in equities amid uncertainty, pending. The trend signals a broaden-
even as the broader MF industry maintains a strong long-term growth tra- ing of the industry, which currently has
jectory. 46 asset management companies.

14 | 2025 | JULY | BANKING FINANCE