Fidelity Funds, one of the largest mutual funds of the United States, and ABN Amro have stuck to their plans to enter the Indian markets, even as the industry's poster boy Samir Arora was barred by the Securities and Exchange Board of India for 'unfair trade practices.'
The Association of Mutual Funds in India chairman A P Kurian said ABN Amro was waiting for Sebi approval to open shop, while Fidelity has completed its survey of the domestic market.
Kurian said ABN Amro would enter the Rs 104,762 crore (Rs 1,047.62 billion) domestic market within a couple of months, while Fidelity would "take some more time."
"There is no question of backtracking by the entrants. The Sebi verdict on Arora is a stray incident in the industry," Kurian said.
Sebi barred Arora from dealing in securities till further orders for his alleged involvement in insider trading, non-disclosure of information and unfair trade practice.
Industry sources said in addition to new funds, existing players have not deviated from plans on new schemes.
They included monthly income plan and index scheme by JM Mutual Fund; income plus scheme by Kotak Mahindra; global opportunities scheme by Principal; a new investment fund from UTI and a bond fund by DB.
They added the Sebi verdict on Arora would benefit the industry as retail investors would understand that misutilisation of public money would not be tolerated. Arora may appeal the order.
Experts said the mutual fund industry was in the pink of health and was immune to punitive action against the head of a fund.
During the quarter ended June, mutual fund sales more than doubled to Rs 1.21 lakh crore (Rs 12.10 billion). Eight new schemes were launched, collecting Rs 1,654 crore (Rs 16.54 billion). On net basis, there was inflow of Rs 20,023 crore (Rs 200.23 billion) during the period.
