'I don't think expense ratios of passive funds can go any lower, at least in the interim'

Revision of expense slabs by the regulator, the push towards passives, and the anticipated entry of several new AMCs translate into a greater focus on cost. Do you believe there is potential to drive the costs (expense ratios) down substantially from the current levels while still running the business profitably?
If you look at the passive-fund expense ratios in India, they're already at global standards. Today, for example, you have Nifty 50 ETFs and index funds for 10-20 bps. I don't think these can go any lower, at least in the interim. The passive pie is far too small and the conversation about a further drop in costs will only come into the picture when this index fund AUM grows exponentially.

This article was originally published on December 27, 2021.