At a time when foreign fund houses are exiting Indian asset management business, a few domestic players are gung-ho about starting mutual fund business.
SEBI has recently given in-principle approval to Fortune Financial Services & Fortune Credit Capital to set up its AMC business, shows the latest data on ‘Status of Mutual Fund Applications’ as on August 2016. In June, SEBI had given in-principle approval to Yes Bank which is expected to launch its operations within a year.
Fortune Financial Services & Fortune Credit Capital is listed on BSE and is SEBI registered Category I Merchant Banker. It also has a Portfolio Management Services (PMS) license. The company has four business verticals viz. Fortune Equity Brokers, Fortune Commodities & Derivatives, Fortune Credit Capital and Fortune Financial India Insurance Brokers.
Meanwhile, SEBI data shows that Trust Investment Advisors and Karvy Stock Broking are awaiting approval from SEBI to launch mutual fund business in India.
While Yes Bank and Fortune Financial Services & Fortune Credit Capital have approached SEBI in November 2015 and June 2015 respectively, Trust Investment Advisors had applied for a license in September 2014. Karvy Stock Broking is waiting to get in-principle approval from SEBI since five years. It had applied for AMC license in November 2011.
Interestingly, all four companies have a mutual fund distribution arm. AMFI data shows that Yes Bank, Trust Investment Advisors and Karvy Stock Broking have assets under advisory (AUA) of Rs.678 crore, Rs. 1,115 crore and Rs. 5,056 crore respectively as on March 2015. The AUA details of Fortune Financial Services & Fortune Credit Capital is not available in the AMFI’s list of top 500 distributors.
In February, Mahindra & Mahindra Finance got SEBI approval to float an asset management business.
According to SEBI rules, the sponsor applying for a mutual fund license 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 an approval.
