Zerodha AMC gets mutual fund licence; Vishal Jain appointed as CEO

Vishal Jain, former Nippon India MF executive, to head the MF business

Zerodha Asset Management Company (AMC) has received final approval from the market regulator to commence a mutual fund (MF) business, according to an announcement by Zerodha's founder Nithin Kamath on Friday. Zerodha AMC is a joint venture between discount broker Zerodha Broking and fintech platform Smallcase.

"We just received the final approval for Zerodha AMC that we are building in partnership with Smallcase," Kamath stated in a social media post.

Vishal Jain, who previously served as the head of exchange-traded funds (ETFs) at Nippon India Mutual Fund, has been appointed as the Chief Executive Officer of Zerodha AMC.

The new entrant to the Rs 46-trillion MF industry will only offer passive funds. Navi MF is the only passive-focused AMC at present, though it has active funds by way of acquisition of existing funds of Essel MF.

The Securities and Exchange Board of India (Sebi) is in the process of introducing 'MF Lite' regulations aimed at reducing the compliance burden of passive MFs. This move is expected to lower the cost of managing passive funds.

"We aim to be index-only and create simple funds and ETFs that all investors can understand and invest in for all their goals," Kamath further explained.

Zerodha applied for the MF licence in February 2020 and received the in-principle approval in September 2021.

In related news, Helios Capital's founder Samir Arora announced on Thursday that the portfolio management services (PMS) firm has received the final nod from Sebi to launch a mutual fund. Arora is making a re-entry into the 43-player mutual fund industry.