Rising Equity AUM might not benefit AMC players if there is relentless pressure on margin via competition from new entrant, passive equity investments and regulatory cap on fees.
With fintech startups, investing in overseas market is becoming easier. So rising allocation of Indian investor’s equity portfolio will also go to overseas asset manager offering cheaper passive investment options.
HDFCAMC AUM hasn’t done that great over last 5 years and revenue growth is even more disappointing. When starting valuation has sky high, stock returns might be very different than performance of the underlying business.
There is a limit for improving profits when business is not generating good revenue growth.
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