AMCs take a hit, shares plunge up to 11 pc on Sebi move

Shares of asset management companies (AMCs) ended with sharp losses of up to 11.3 per cent Wednesday after markets regulator Sebi decided to slash the charges levied on investors by mutual funds.

The scrip of Reliance Nippon Life Asset Management plunged 11.28 per cent to close at Rs 190 on BSE. Intra-day, it dived 13 per cent to Rs 186.20 -- its 52-week low. The company's market capitalisation declined Rs 1,477 crore to Rs 11,628 crore.

Shares of HDFC AMC tumbled 8.55 per cent to end at Rs 1,408.55. Intra-day, it tanked 9.29 per cent to hit a one-year low of Rs 1,397. HDFC AMC's market valuation fell by Rs 2,790.32 crore to Rs 29,859.68 crore.

HDFC Asset Management Company got listed on the bourses on August 6, 2018. HDFC AMC's scrip has surged 28 per cent from its issue price of Rs 1,100 per share since listing.

Commenting on Sebi's announcement on significant changes to the total expense ratio (TER) structure, JM Financial Institutional Securities said in a report: "While the move is a positive step towards increasing reach and reducing costs for retail MF investors as also improving transparency, it has a negative impact on profitability for AMCs."