HDFC Mutual Fund's perks to distributors make industry see red

Fund house has made equity share placement to key distributors ahead of its IPO; rivals see it as conflict of interest

The Rs 23-trillion mutual fund (MF) industry is seeing red over equity share allotment made by the country’s most profitable fund house HDFC MF to the distributor community, which continues to remain a vital link between investors and asset management companies (AMCs).
 
Ahead of its much-awaited initial public offering (IPO) — only second by an AMC so far — HDFC MF, which manages assets worth over Rs 3 trillion, has made a private placement of shares worth Rs 1.5 billion to 140 distributors. While in its offer document filed with the Securities and Exchange Board of India, the asset