Samco Securities gets final license to launch its mutual fund business

The Mumbai-based stock broker has an overall base of 2.5 lakh clients. (Representative image)

Samco Securities has become the latest firm to receive approval from SEBI to start its mutual fund (MF) business.

“We received the approval from SEBI on July 30, 2021. We are planning to focus on actively-managed funds. We plan to come up with products that will help us to differentiate from an overcrowded market of actively-managed funds,” said Omkeshwar Singh, who heads the company’s MF distribution arm Rank MF.

He added that Samco had already built the team for the mutual fund business. Samco will be sharing details of its mutual fund team in the next few weeks.

Entry into the Rs 33-trillion mutual fund industry will help Samco Securities diversify from a brokerage-business to a fee-based business.

The Mumbai-based stock broker has an overall base of 2.5 lakh clients.

Advantage of a distribution arm

Jimeet Modi, founder and chief executive officer of Samco Securities, said that in the last 12-18 months, Rank MF has gained a decent distribution reach, which will help to grow the Samco’s mutual fund business.

He pointed out that both the mutual fund distribution and fund management opportunity in India was large and Samco wants to focus on both separately.

Recently, NJ India -- the country’s largest distributor -- got approval from SEBI to start its own mutual fund business.

Also read: NJ India: The distributor of schemes will now run a data-driven mutual fund house

Others in the waiting

There have been several financial firms that have applied to SEBI for mutual fund license in recent months.

Zerodha Broking, Bajaj Finserv, as well as PMS players like Capitalmind Wealth, Unifi Capital, Alchemy Capital and Helios Capital, have approached SEBI for mutual fund license.

Also read: Why do PMS firms want to become mutual funds?

At present, these firms’ licenses are under various stages of the approval process.

The under-penetration of mutual funds in India is what is drawing more financial firms to the mutual fund business.

A recent Jefferies report states that assets under management of MFs are just 12 percent of India’s GDP, whereas the global average is 63 percent.