August 29, 2025

Mumbai is witnessing a stock market rollercoaster with Asset Management Companies (AMCs) leading the charge! These listed AMCs have seen their shares skyrocket this year, riding a wave of record inflows and hopes for lighter regulations. For example, Nippon Life India AMC's shares have zoomed up by 56%, HDFC AMC by 54%, UTI AMC by 38%, and Aditya Birla AMC by 36% in just six months. Meanwhile, the Nifty Financial Services Index rose a modest 11.3% in the same period. Why this euphoria? Investors are pouring money into equity schemes even amid volatile markets. July was a blockbuster month with equity mutual funds collecting ₹42,702 crore—the highest ever in a single month! The star attractions were midcap, smallcap, and sector funds. Also, Systematic Investment Plan (SIP) contributions hit a record ₹28,464 crore. Prashanth Tapse, Senior Vice President of Mehta Equities, explains, "The record-high inflows into AMCs are making them structural winners." He adds, as assets grow, AMCs rake in more fees, sparking a sharp rerating of the sector. The overall mutual fund industry is booming, with assets under management (AUM) reaching a massive ₹76.74 lakh crore and fund folios jumping from 10 crore in May 2021 to 24.57 crore by July-end. This growth has attracted new players like Jio BlackRock, Angel One Mutual, Unifi Capital, and Pantomath Capital Advisors. On top of that, big names like ICICI Prudential AMC and Canara Robeco are planning to list their shares publicly. This means more competition and possibly less room for existing AMC stocks to shine. "AMC stocks used to trade at 20-25 times earnings," Tapse notes. "But the hype has pushed some valuations to 35-40 times." Investors have been eager to pay big because they see AMCs as long-term growth stars, similar to insurance firms. However, this race might slow soon. Siddarth Bhamre, head of Institutional Research at Asit C. Mehta, warns, "Whatever the best could have happened has happened for these companies." He predicts, "The tide is going to shift. Newer and larger high-potential players are entering the equity market, making it more competitive and markets are now looking more expensive than ever." As a result, AMC stocks might face a speed bump soon, with prices expected to correct by 5% to 7% in the near term. So, while the AMC story dazzled investors so far, the upcoming chapters may bring new twists in this thrilling stock saga. (Stay updated with the latest on Sensex, Nifty, and top stocks like SBI, Axis Bank, HDFC Bank, Infosys, and more on ETMarkets. For quick alerts, follow their Telegram and WhatsApp channels!)

Read More at Economictimes →

Tags: Asset management companies, Amc stocks, Mutual funds, Stock market, Inflow records, Valuations,