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Half Century

The number of registered AMCs has hit 50, even as the industry grapples with changes...

The tribe of asset management companies is growing. The 50th entity to get the Sebi-clearance to enter the fray is Mumbai-based financial services company – Parag Parikh Financial Advisory Services (PPFAS). The Indian asset management business is predominantly made from sponsors including banks, large distributors and players in the financial services industry. The entry of PPFAS has been in the news for sometime, and the company decided to enter the asset management business ever since changes were proposed in the portfolio management services (PMS) business.

Although there are 50 registered AMCs, there are many that are yet to commence operations or have suspended their operations. CRB Mutual Fund, which was suspended from doing business in 1996 still finds mention in the list with other non-operating AMCs such as Shriram Mutual Fund, Alliance Capital Mutual Fund, Fidelity Mutual Fund, KJMC Mutual Fund and ICICI Securities Fund. In the case of both Alliance Mutual and Fidelity Mutual fund, the AMCs sold their existing schemes to Birla Sun Life and L&T Mutual fund respectively, while they continue to operate as asset management companies.

The minimum capital required to set up an AMC is still Rs10 crore despite several attempts to raise this threshold, set in 1997, to Rs50 crore. The new entrant, PPFAS, plans to launch an equity fund, which will be the primary fund before it considers other types of schemes in its stable.