Thanks to rising market, healthy inflows in existing funds and new fund offers, the commissions earned by the top 15 MF distributors has soared by 94% last fiscal.
The commissions of top 15 MF distributors soared to Rs. 2,788 crore in FY14-15 from Rs.1,436 crore in FY13-14.
An analysis of commission paid to the top 467 MF distributors’ shows that these distributors revenue stood at Rs. 4,729 crore last fiscal. In FY2013-14, the top 329 distributors earned Rs. 2,582 crore. Also, AMFI data shows that the number of distributors falling under the purview of SEBI criteria of ‘top distributors’ has increased to 467 in FY14-15 from 329 in FY13-14.
One of the main reasons for the increase in commission payout is due to increase in total equity AUM.
The total equity AUM (including ELSS) of the industry has gone up from Rs. 1.92 lakh crore in April 2014 to Rs. 3.45 lakh crore in March 2015. The AUM of balanced funds too has gone up Rs. 13,370 crore to Rs. 26,368 crore during the same period. “Both equity funds and balanced funds are full fee assets. As compared to debt funds, distributors earn more commissions on equity funds and balanced funds,” said a Mumbai based distributor.
Among the top 15 MF distributors, HDFC Bank piped Citibank to become the largest MF distributor in FY14-15. HDFC Bank’s revenue from MF commissions went up to Rs. 329 crore last fiscal from Rs. 159 crore in FY13-14. Citibank saw its commissions revenue soar from Rs. 181 crore to Rs. 229 crore during the same period.
Interestingly, Axis Bank which was the eighth largest MF distributor last fiscal piped the likes of ICICI Bank, NJ India, IIFL Wealth Management to reach the second rank. After HDFC Bank, Axis Bank is the second largest distributor of mutual funds as its revenue from commissions went up from Rs. 94 crore to reach Rs. 304 crore during the same period, which is a growth of whopping 223%.
The second highest growth (in percentage terms) was recorded by Kotak Bank. Kotak Bank’s revenue from MF commissions soared to Rs. 255 crore in FY14-15 from Rs. 99 crore in FY13-14.
Surat based NJ India retained its mantle of being the third largest MF distributor. Its commissions soared from Rs. 149 crore to Rs. 303 crore during the same period. “The markets were high which helped the industry gain on a mark-to-market basis. Also, equity sales were at an all-time high last fiscal. The SIP book has also increased across the industry. All these factors helped us grow,” said Neeraj Choksey, Jt. Managing Director, NJ India Invest. The companys website claims that it has more than 21,000 partners/sub-brokers spread across 21 states in India who sell mutual funds.
The industry received net inflows of Rs. 71,000 crore in equity funds while debt funds received Rs. 22,556 crore last fiscal. The industry has mobilized Rs.15,400 crore from 84 equity fund NFOs in FY 2014-15.
State Bank of India, Indusind Bank and Prudent Corporate Advisory were among the distributors who made it to the top 15 MF distributors list last fiscal while the likes of Deutsche Bank, JM Financial and DSP Merrill Lynch saw their position slip, though these distributors recorded an absolute growth in their commissions.
