With growing popularity of mutual funds among investors, a few domestic players have shown their interest in launching mutual fund business.
According to SEBI’s website, two new players Samco Securities and Equity Intelligence India have applied to launch their mutual fund business. Altogether, five players including Muthoot Finance, Frontline Capital Services and Karvy Stock Broking are awaiting approval from SEBI to launch their mutual fund business in India.
While Samco Securities approached SEBI in June 2018, Equity Intelligence India has been waiting to get in-principal approval from SEBI since January 2018.
While Samco Securities is an online discount brokerage firm like Zerodha, Equity Intelligence India runs PMS and AIF business. Jimeet Modi founded Samco Securities is located at Mumbai. Similarly, Porinju Veliyath is the founder of Kochi based Equity Intelligence India.
Muthoot Finance, Frontline Capital Services and Karvy Stock Broking approached SEBI in March 2017, July 2017 and November 2011, respectively. These three companies have a mutual fund distribution arm.
Last year, Yes Bank, Fortune Financial Services and Trust Investment Advisors got SEBI in-principle approval to float an asset management business. In fact, both Yes Bank and Fortune Financial Services (ITI Mutual Fund) have announced the launch of their AMC businesses.
SEBI rules say that the sponsor applying for a mutual fund licence is required to be in the financial services business for five years and needs to have a positive net worth for five years. The sponsor should have earned profits in three of the previous five years, including the latest year. SEBI conducts an on-site due diligence of sponsors before granting approval.
