AMC stocks rally as SEBI cuts mutual fund expense ratios

Shares of asset management companies jumped on Wednesday after the Securities and Exchange Board of India announced a cut in mutual fund expense ratios.

The move was seen as a structural positive for the industry. Nippon Life India Asset Management surged 6.48%. HDFC Asset Management Company rose 4.49%. UTI Asset Management Company gained 3.93%. Nuvama Wealth Management added 3.37%. Aditya Birla Sun Life AMC climbed 2.77%, while Motilal Oswal Financial Services advanced 2.18%.

SEBI on Wednesday (17 December 2025) decided to lower mutual fund expense ratio limits, now termed the Base Expense Ratio or BER. The BER will exclude all statutory levies such as GST, stamp duty, SEBI fees and exchange charges. The regulator also clarified that the total expense ratio will not be calculated by adding these levies to the BER.

The revised norms apply across a wide spectrum of products, including index funds, exchange traded funds, fund of funds, equity-oriented schemes with over 65% of assets under management invested in equities, closed-ended schemes and non equity-oriented schemes.

For investors, the change means lower costs and higher net asset values. This is expected to make mutual funds more attractive. For asset management companies, the move offers greater cost flexibility and could drive higher inflows.

Market participants expect the lower fee structure to boost retail participation. That, in turn, could support long-term growth in assets under management and client additions.

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