PhonePe applies for MF license, joins six other fintechs awaiting Sebi nod

Walmart-owned Phonepe has applied with the Securities and Exchange Board of India (Sebi) for a mutual fund (MF) license, joining other fintech rivals to harbour an ambition to set up an asset management company (AMC).

Recently, India's largest brokerage Zerodha received in-principle approval to start MFs operation. Flipkart co-founder Sachin Bansal-backed Navi Mutual Fund has aggressively launched passive schemes at a low cost.  

PhonePe entered financial services in 2017 with the launch of gold providing users with a safe and convenient option to buy 24-karat gold, and recently also launched silver on its platform.

Currently, The digital payments major through its platform sells third-party MF products.

At present, seven players including Phonepe are waiting for in-principle approval from the market regulator. Other players include Angel One , Old Bridge Capital Management and Helios Capital Management PTE among others.  

Most players are trying to establish a certain niche to gain a foothold into the Rs 38-trillion MF industry which has around 45 AMCs.

Market participants say that the arrival of new age players into the MF industry is to tap the savings of ‘new generation’ investors.

Despite witnessing a sharp surge in assets in the last few years the penetration of MFs has remained low.