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Strengthening MF performance; diversification on the cards

• Nippon Life India AMC (NAM) ranks among the top 10 AMCs, demonstrating the fastest QAAUM growth with a 27% YoY increase to INR6.1t as of Jun’25. This growth has boosted its overall market share to 8.5%, marking a rise of 23bp QoQ (the highest since Jun’19). The performance was supported by consistent net inflows, strong SIP traction, and a healthy equity mix (46.9% as of Jun’25).
• SIP AUM grew 27% YoY to INR1.5t, driven by steady flows and lower discontinuation rates, capturing a 10.1% market share. ~75% of SIPs are INR10k, ensuring stability and high retention. NAM remains among the largest
  ETF players, with an AUM of INR1.7t, accounting for ~52% of industry
  folios/~51% of ETF volumes on BSE and NSE.
• The company is scaling its alternatives and offshore businesses, with INR81b in AIF commitments and INR166b in offshore AUM. These segments serve as incremental growth levers beyond the core mutual fund franchise, gaining increasing traction from institutional and global investors across segments.
• NAM is strategically scaling its Specialized Investment Fund (SIF) platform as a high-potential, standalone business focused on differentiated, alpha-generating strategies. Backed by a dedicated team and strong management commitment, the SIF vertical is being positioned as a key long-term growth engine.
• NAM reported blended yields of 36bp in 1QFY26 (equity: 55bp). Around 45% of its equity AUM has undergone pricing resets. Management expects a gradual annual decline of ~2-3bp due to telescopic pricing adjustments but aims to offset this impact through diversified retail flows, SIP growth, and product innovation.
• We project a 14%/16%/15% CAGR in revenue/EBITDA/PAT over FY25-27E. We reiterate a BUY rating on the stock with a TP of INR930, premised on 34x FY27E earnings.

Fastest-growing AMC with steady SIP flows and ETF dominance

• The company’s MF QAAUM grew 27% YoY/10% QoQ to INR6.1t, leading to a sharp ~23bp QoQ rise in the overall MF market share to 8.49% (the highest since Jun’19) and ~12bp QoQ rise in equity AUM market share to 7.04%. Equity (ex-arbitrage) assets accounted for 46.9% of the total AUM mix as of Jun’25.
• SIP AUM stood at INR1.5t, up 27% YoY, with monthly SIP flows of INR273b (an all-time high). SIP AUM continues to demonstrate higher stickiness, with 52% retained over five years, compared to the industry average of 30%. Steady inflows and lower discontinuation rates compared to the industry have driven continuous gains in SIP market share, which reached 10.1% as of Jun’25. Notably, ~75% of SIPs by value are below INR10k, ensuring flow stability and long-term retention. Management aims to diversify the SIP book across categories and design SIP-focused products to further enhance its resilience.
• NAM commands the industry’s largest retail investor base, with 21.2m unique investors (representing over one in three mutual fund investors) as of Jun’25.
• The company maintains a comprehensive product bouquet in the MF segment, with 45 active schemes and 52 passive schemes (including four launched in 1QFY26). It remains focused on introducing unique products aligned with evolving investor needs.
• NAM remains one of the largest ETF players, with AUM of INR1.7t, rising 34% YoY, and a 19.8% market share as of Jun’25. It holds a dominant ~52% share of industry ETF folios and ~51% of ETF volumes on NSE and BSE (ADV across key funds higher than the rest of the industry). As of Jun’25, NAM’s Gold ETF ranked among the top 10 globally in terms of AUM.
• Overall, NAM’s mutual fund segment performance reflects its focused strategy on scaling retail participation, driving product innovation, and enhancing operational intensity, positioning it as a credible compounding franchise in the Indian asset management industry

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