SEBI Chief Ajay Tyagi has today said that the market regulator is keen to increase retail participation in mutual funds. In fact, the market regulator has been working with the industry and AMFI to improve penetration from B30 cities, he said. Tyagi was speaking on ‘USD 5 Trillion economy – Role of capital markets’ at FICCI Capital Market Conference held today in Mumbai.
Tyagi said, “In the medium term, especially keeping 2025 as the target year, the outlook for mutual funds looks quite positive. We have been working with the industry to improve penetration to the B-30 areas, especially from the retail investors. AMFI has projected a four-fold growth in AUM over the next decade. There has to be an increased focus on penetration, targeting new set of investors, self governance and investor education & awareness to achieve this.”
Expressing his concern over low penetration of MF, Tyagi said, “The fact that mutual funds enjoy trust of investors and have caught their fancy is reflected in the fact that the industry AUM has increased from around Rs.11 lakh crore four years ago to around Rs.25 lakh crore now. Number of mutual fund folios have also doubled during the same period from around 4 crore to 8 crore. However, there is tremendous scope for further growth if we compare with global markets. While the global average for industry AUM to GDP ratio is around 60%, the corresponding figure for India is only 11%.”
On debt funds, Tyagi said at the sidelines of the event that the market regulator do not recognize so-called standstill agreement between mutual funds and corporates. In fact, he made it clear that there will be no exception to this policy.
Tyagi’s comment on standstill has come after Essel group has announced that it has reached an agreement with fund houses to extend date of repayment of loan given to the group against pledged shares.
On Inter-Credit Agreement (ICA), he said that SEBI has come out with regulations in which fund houses who have segregated their portfolio can avail this facility.
