Nuvama Wealth rallies over 4 percent on Sebi's nod to sponsor a mutual fund

India's mutual fund AUM is currently ~20% of GDP (versus over 100% in mature markets), having tripled over the past five years, supported by systematic investment plans and a surge in retail market participation.

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26 Aug, 2025 12:21

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Capital market regulator Sebi has approved Nuvama Wealth Management's application seeking to act as a sponsor to set up a mutual fund, the company informed exchanges through a filing, sending the shares higher by more than 4 percent on October 3.

"We are pleased to inform that SEBI vide letter dated October 1, 2025, has granted approval to the Company to act as the sponsor and set up the proposed Nuvama Mutual Fund," the statement said. a final approval for registration of the mnutual fund will be granted subject to fulfilment of the stipulated requirements.

Nuvama's Request for MF Sponsorship

In January 2025, the company had informed exchanges about the application seeking approval to act as the sponsor for Nuvama Mutual Fund. This would enable it to launch mutual funds as well as Specialized Investment Fund (SIF).

On YTD basis, Nuvama's shares are flat but are higher by 10 percent over the last one year.

The Mutual Fund Boom

India's mutual fund AUM is currently around 20% of the GDP as against over 100% in mature markets, however, it has tripled in the last five years on the rise of systematic investment plans and a surge in retail participation. The number of demat accounts stand at over 20 crore as of mid-2025.

A strong GDP growth, rise in entrepreneurship and generational wealth transfers have increased the HNWIs and affluent households in India, making it increasingly visible in beyond-tier-30 (B30) cities. "In B30 markets, a large untapped pool of affluent households still manages financial assets themselves or invests heavily in traditional categories such as bank deposits, representing significant conversion potential to professional wealth services," Nuvama had recently said. India’s mutual fund industry has risen to Rs 74 lakh crore in AUM as of June 2025, riding on strong retail inflows, and SIPs exceeding well over Rs 20,000 crore per month, underscoring a deeper penetration beyond metro cities.

Factors Fuelling the Rise

"...technology upgrades, including T+1 settlement, straight-through processing, and cloud-based platforms, are
enabling greater scale, efficiency, and new product support. An evolving regulatory framework is further
reinforcing the role of regulated, well-capitalised service providers. Together, these factors position incumbents
and specialist players to capitalise on a multi-year growth runway in India’s markets infrastructure business," Nuvama said. Sebi's move to lower the minimum SIP amount to just Rs 250 too has made investing significantly more accessible.

FY25 marked nearly one crore new MF investors joining in a single year, underscoring a broadening of the financial inclusion. However, despite more than 73 crore Permanent Account Numbers (PAN), India's mutual fund investor base stands at just over 5 crore, underscoring the headroom for growth.