Maharashtra commands lion’s share of industry’s new ARN registrations

It is not just the industry AUM, Maharashtra holds the top position in terms of new ARN and EUIN registrations too. The state accounts for 28% of the new ARN registration, shows recent AMFI data on geographical spread of the new ARN holders last fiscal.

This is because Maharashtra is the commercial capital of India, believe experts. The state has added the highest number of new ARNs and particularly EUINs through corporate employees, they said.

Gujarat and Uttar Pradesh followed Maharashtra for second and third positions, respectively. Both Gujarat and Uttar Pradesh have contributed 9% and 7% new distributors. Tamil Nadu is marginally behind Uttar Pradesh.

Put together the top three states account for over 45% of the new ARN and EUIN registrations.

In FY 2018-19 the industry added 55,955 new distributors, of which 17,625 are individuals and 37,048 are corporate employees. A rough estimate shows that Maharasthra added 15,667 new ARNs and EUINs. Similarly, Gujarat and Uttar Pradesh added 5,035 and 3,916 new ARNs and EUINs, respectively.

AMFI data further shows that 39% of overall new registrations were from B30 towns.

However, the industry has witnessed a slowdown in new ARN registration post upfront commission ban. AMFI’s latest data on status of registration of new ARN shows that the MF industry added 17,625 new IFAs in FY 2018-19 as against 20,339 distributors in FY 2017-18 under the individual category, a decline of 13%.

If we look at the data in detail, the industry has seen a massive decline in new ARN registrations under the individual category post October. While the industry added 6,660 new distributors in the individual category in the second half of FY 2018-19 i.e. October 2018-March 2019, close to 11,000 individuals joined mutual fund distribution business in the first half. A rough calculation indicates that the industry witnessed a decline of 40% in terms of the number of new distributors following the ban on upfront commission post October 2018.

Further, AMFI data shows that nearly 3,898 individual distributors chose not to renew their ARN in FY 2018-19. This is much higher than the corresponding figure for the previous fiscal. AMFI data shows that 2,475 distributors did not renew their ARN in FY 2017-18. Overall, 19,902 ARNs and EUINs were not renewed last fiscal.

Meanwhile, 33,677 ARNs got renewed last fiscal. Of these, over 19,531 ARN renewals were from the individual category. In FY 2017-18, 26,712 ARNs were renewed.

As on March 2019, the mutual fund industry has over 2.01 lakh ARNs of which over 92,959 are individual distributors and 1.09 lakh are employees.

State-wise new ARN registration as on March 2019

Source: AMFI