India’s Top AMCs Analyzed

Key Points

• India’s mutual fund industry is booming, especially with equity investments.
• Nomura sees strong growth for Nippon Life and HDFC Asset Management.
• Equity investments drive much of this growth, with a huge rise in the last decade.
• Investors are increasingly choosing equity and passive funds (like ETFs).
• AMCs are gaining market share, particularly HDFC AMC and Nippon Life.
• Regulatory changes could impact AMC revenue, but restructuring is expected.

India’s mutual fund industry is experiencing significant growth, primarily fueled by a strong interest in equity investments. According to Nomura, a leading global brokerage, this growth is largely driven by increasing retail participation and consistent inflows, leading to substantial gains in Assets Under Management (AUM). This growth presents attractive opportunities for specific asset management companies.

Nomura has identified Nippon Life India Asset Management (NAM) and HDFC Asset Management Company (HDFC AMC) as its top picks. They highlight these companies’ robust AUM and operating profit growth. Nomura believes these companies are well-positioned to benefit from the continued trend in the Indian mutual fund market.

A key factor in this growth is the shift in investor preferences. Equity investments have grown tenfold over the past decade, now representing 59% of overall AUM in FY25, compared to 34% in FY15. This indicates a growing comfort level with higher-risk investments, which is a positive sign for the industry.

Nomura projects that equity AUM will continue to expand at a 20% Compound Annual Growth Rate (CAGR) from FY25 to FY28F, supported by ongoing inflows and the popularity of Systematic Investment Plans (SIPs). SIPs, regular investments of a fixed amount, now account for 26% of gross inflows, a significant increase from the average 22% recorded between FY17-25.

Despite a recent 11% increase in the Nifty 50 (a major Indian stock market index) in FYTD26, Nomura anticipates stable AUM growth due to the combination of continued inflows and market gains. The brokerage also notes the low penetration of mutual funds in India – only 57 million unique investors as of 2QFY26, representing approximately 4% of the population. This highlights considerable room for further growth.

Furthermore, 72% of passive AUM is invested in equity index funds and ETFs, indicating a growing preference for lower-cost, passively managed investments. This trend is expected to continue. Nomura is also closely monitoring market share movements for HDFC AMC and NAM, as these shifts can provide valuable insights into investor behavior.

Regarding regulatory changes, Nomura acknowledges a consultation paper by the Securities and Exchange Board of India (SEBI) proposing the removal of additional charges on schemes with exit loads. While this could negatively impact AMC revenue, Nomura expects AMCs to adapt their distributor payout structures to mitigate any potential losses.

Finally, Nomura projects AUM CAGRs of 21%, 19%, and 17% for NAM, HDFC AMC, and UTI AMC respectively, over the next few years, anticipating favorable equity market conditions and operational efficiency.

“The Indian mutual fund industry presents significant growth opportunities for well-positioned asset management companies.”