The joint venture of Jio Financial Services and BlackRock to foray into India's asset management space could be disruptive but not disastrous for incumbent industry players, analysts said on Thursday. As an investment strategy, analysts suggest investors stay put in shares of those AMCs that consistently improve business metrics, and where market capitalisation-to-asset under management (AUM) valuation is not stretched. However, growth expectations of incumbent players may get trimmed in the medium-to-long term, analysts said, once the Jio-BlackRock JV unveils its plans, discounting the looming challenge as significant enough to dent their profitability.
While Angel One and Unifi Capital have obtained the final licence, Jio BlackRock, Capitalmind, Choice International and Cosmea Financial Holdings have received in-principle approvals.
India's thriving mutual fund (MF) industry is drawing interest from several firms, with multiple applications submitted to the Securities and Exchange Board of India (Sebi) for asset management company (AMC) licences.
The strong domestic flow offset selling by foreign portfolio investors who pulled out $23.3 billion (Rs 2.03 trillion) from domestic equity markets in CY25.
'When markets go into a budget with excessive optimism, the risk of disappointment is higher.'
'Indian markets may underperform global peers for the next two quarters.' 'But beyond that, India should catch up and resume its long-term growth path.'
The queue for mutual fund (MF) licences has thinned down due to quick clearances by the Securities and Exchange Board of India (Sebi) alongside applications being withdrawn amid regulatory changes. There were, at the end of September, only two pending MF applications: By AngelOne and Unifi Capital. By comparison, there were 11 applications lying before the market regulator at the start of calendar year 2023.
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