HDFC AMC

The mutual fund industry's quarterly average AUM reached INR 83.1 trillion for Q1 FY27, growing 15% Y-o-Y. Equity-oriented AUM crossed INR 47 trillion, up 16% Y-o-Y. HDFC AMC's QAAUM stood at INR 9.35 trillion, a 13% Y-o-Y increase, with a market share of 11.2%. Excluding ETFs, the market share was 12.4%. Actively managed equity-oriented QAAUM grew 16% Y-o-Y to INR 5.74 trillion, with equity-oriented assets accounting for 65.7% of HDFC AMC's QAAUM versus 56.6% for the industry.

SIP contributions reached INR 318 billion in June 2026, a 17% Y-o-Y growth from INR 273 billion in June 2025. The industry added 6.6 million new unique investors over the last 12 months, bringing the total mutual fund investor base to 61.9 million. HDFC AMC added approximately 0.46 million unique investors during the quarter, taking its base to 17.1 million, representing 28% penetration in the mutual fund industry. Management noted that fintechs registered 8.6 million SIPs in Q1 FY27, a significant increase from 400,000 in FY19-FY20, indicating a shift in investor acquisition.

Debt QAAUM stood at INR 1.66 trillion with a 12.9% market share, while liquid QAAUM was INR 851 billion with a 10.7% market share. Debt funds experienced net outflows of INR 757 billion in Q1 FY27, contrasting with liquid funds which added INR 984 billion. Management attributed debt fund redemptions to volatility in the rupee, interest rates, crude oil prices, and the global environment, emphasizing the need for the industry to make debt funds more attractive to retail investors.

HDFC AMC is actively building its alternatives platform. Total alternatives AUM, including AIF commitments, portfolio management services business, and advisory mandates, grew from INR 60 billion to INR 148 billion Y-o-Y. The company is closing a private credit fund this quarter and received approval to launch a second venture capital/private equity fund, with a marquee global investor committing $50 million to seed it. The Board also approved the first SIF offering, an H-SIF equity ex top 100 long-short fund, to be launched in the near term, aiming to build a full suite of SIF products.

The industry transitioned from TER (Total Expense Ratio) to BER (Brokerage and Expense Ratio) plus statutory levies, effective April 1, 2026. This change, along with the removal of 5 basis points of additional TER for exit load and rationalization of brokerage limits, has led to adjustments in commission structures. Management stated their approach is to offset the impact through optimization of commission structures and prudent cost management, aiming to maintain operating margins within the 33-35 basis points range of AUM.

Total cost for the quarter was INR 2.7 billion, up from INR 2.1 billion in Q1 last year. The increase in Q1 employee costs was largely due to year-end increments and valuation of employee benefits. The total non-cash ESOP expense is projected to be INR 79-80 crores for FY27, INR 63 crores for FY28, INR 41 crores for FY29, and INR 11 crores for FY30. CSR expenditure in Q1 was higher than Q4 last year and Q1 of the previous year, as it is a function of when partners require funding.

HDFC AMC has significantly expanded its product bouquet across active and passive funds, including index, ETFs, sector, and thematic funds. On the PMS side, new products have been launched, and senior resources hired. The company aims to be a one-stop solution for all investors, building capabilities in investment management, risk management, and product management. Management highlighted strong performance across several funds over 3, 5, and 10-year periods, with many in the top two quartiles, and expressed confidence in their investment team and processes.

While banks continue to contribute to growth, fintechs have emerged as a significant channel, particularly for SIPs, with their numbers growing exponentially. This shift has impacted the relative share of other participants. Management views fintech platforms as genuine partners, contributing to bringing in incremental new and younger investors. The company's penetration in the mutual fund industry now stands at 28%, up from 25% a year ago, indicating that 28 out of 100 mutual fund investors have invested with HDFC AMC.