The development comes at a time when retail frenzy has seen a significant rise on Dalal Street, thanks to stellar returns.
Market participants say the competition in the MF industry will only get more intense as the market regulator recently relaxed ownership norms for sponsors of fund houses.
In other words, conditions for getting a mutual fund license have become easier. Until last year, it was mandatory for the sponsor of a mutual fund to be profitable. However, going forward even if the sponsor is not profitable, they are still eligible for the MF license provided they can allocate Rs 100 crore to the AMC and keep it locked in for five years. This relaxation would allow several fintech companies to try their luck in asset management industry.
Traditionally, Indian asset management industry has been dominated by fund houses sponsored by banks and other big financial institutions. HDFC AMC, ICICI Mutual Fund and SBI Mutual Fund are some of the dominant players in the industry currently.
