Nippon Life India Asset Management Earnings Call for Q1FY27

[00:00:00]Good day and welcome to the Nepon [clears throat] Life India Asset Management Q1 FI27 earnings conference call hosted by Motilos Financial Services Limited.

[00:00:11]As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchdown phone.

[00:00:27]I now hand the conference over to Mr. Kartika Mata from Motila Losal Financial Services. Thank you and over to you sir.

[00:00:37]>> Yeah, thank you. Uh good evening everyone. On behalf of Motil do I welcome you all to Nepon life India asset management fund QFI27 earnings conference call. We have along with us Mr. Sep Sikka managing director and CEO and the senior management team. We are thankful to the management for allowing us this opportunity. I would now like to hand it over to Mr. Sep for his opening remarks. Over to you sir.

[00:01:01]>> Thanks Karthik. Uh good evening and welcome to a Q1 FI27 earnings sponsors call. We have with us President and Deputy CEO Sagata Chhatraji, CFO Par Jakar, Deputy CFO Amul Balagi, uh Chief Digital Officer Aran Saha, uh head AIF Ashish Chagani and Deputy Head AF Ashi Ashindul and Matsuis Sun nominee from Nepon Japan. I would like to share the key highlights of our performance and post that I'll hand it over to Parag to speak in greater detail on the recent industry trends as well as our performance. Post which we will move to Q&A.

[00:01:39]Coming to the key highlights, I would like to start by mentioning that NAM India was the fastest growing AMC in the top 10 AMC's in Q1 FI27 on overall and equity am both on aironair basis as well as quarteronquarter basis.

[00:01:56]This led to continued increase of our overall AM and equity AM market share.

[00:02:03]We had the highest increase in AM uh market share in the industry in Q1 FI27 both air on air and quarteron quarter.

[00:02:13]In fact, we even had the highest absolute am growth in the industry in Q1 FI27.

[00:02:21]Our market share continues to grow and touched 9.04%. 04% which is the highest uh since June 2019.

[00:02:31]Importantly, both our equity net sales market share and SIP market share remained well above our equity market share with SIP market share in high single digits and equity net sales market share in double digits for the quarter.

[00:02:48]Moving to our financial performance, NAM India achieved its highest ever quarterly profit after tax at INR 5.04 billion, a growth of 27% year on air as well as the highest quarterly operating profit at INR 4.94 billion, a growth of 31% year on air. Now I'd like to hand the call to Parag for further details on industry and our performance.

[00:03:14]>> So thank you Zip. Uh good evening everybody. Uh let me start off with the markets. Equity market in Q1 FI27 witnessed a rebound rebound from prior quarter levels. The nifty was up 7% quarteron quarter while the nifty midcap and small cap indexes were up 17% and 24% quarteron quarter respectively.

[00:03:36]The repo rate was flat uh quarteron quarter at 5.25%.

[00:03:40]While the 10ear GC yield decreased by 29 bases quarteron quarter to 6.75%.

[00:03:47]Gold and silver prices declined 3% and 1% quarteron quarter respectively.

[00:03:52]Now moving to industry AM and flows.

[00:03:56]Industry quarterly average AM grew by 15% yearonear and 2% quarteron quarter in Q1 FI27 to INR 83.1 trillion.

[00:04:07]The share of equity in overall AM increased by 0.8% quarteron quarter ending at 57.2% for Q1 FI27.

[00:04:18]The equity category X of indexment and arbitrage witness a gross inflow of INR 2.46 trillion and a net inflows of INR 1.13 trillion. Both were lower quarteron quarter.

[00:04:33]Categories with the highest inflows were flexy cap, small cap and midcap funds.

[00:04:38]The fixed income category that is debt and liquid witnessed a net inflow of INR 338 billion in the quarter after an outflow in the previous quarter. The ETF category had a net inflow of INR 291 billion lower on quarteron quarter basis. Cottage unique investor in the mutual fund industry increased 12% year one year to 61.9 million.

[00:05:05]Moving to SIP industry SIP flows for the quarter stood at INA 939 billion up 16% yearonear and 1% quarteron quarter.

[00:05:16]Monthly SIP flows in June 2026 stood at 318 billion near the all-time high levels. Contributing SIP folios for June 2026 increased 13% Y and 1% quarteron quarter to 97.8 million.

[00:05:35]Now moving to our business performance we closed the quarter with total asset under management of INR 8.62 trillion.

[00:05:43]This include mutual fund manage account offshore funds and dividity. Our mutual fund quarterly average AM grew 22.7% Y and 3.7% quarteron quarter to reach INR 7.52 trillion.

[00:05:59]We were the fastest growing AMC in the top 10 in Q1 FI27 on overall and equity AM both on YI and quarteron quarter basis and had the highest increase in quarterly average AUM market share among all AMC's in Q1 and FI27.

[00:06:19]I would now like to share few key highlights for the quarters. Our mutual fund market share increased 54 basis year on year and 15 basis quarteron quarter to 9.04%.

[00:06:30]Our equity market share increased 34 basis yearon year and 22 basis quarteron quarter to 7.38%.

[00:06:38]We achieved a doubledigit net sales market share in the equity segment x of index fund and arbitrage.

[00:06:47]We continue to have the largest investor base in the mutual fund and industry with 24.1 million unique investor. We are humbled to have over one in three mutuals and investor invest with us. I would like also like to touch upon some important aspect of our systematic book.

[00:07:05]I am happy to share that there has been a continued momentum in our systematic flows. Our monthly systematic book rose by 12% yearonear to INR 37.2 billion for June 2026.

[00:07:20]This resulted in an annualized systematic book of INR 446 billion. SIP market share stood at 9.84% for June 2026 similar to March 2026.

[00:07:34]Moving on briefly to ETF signal. We continue to be one of the largest ETA player with AM of INR 2.43 trillion and a market share of 21.35% which increased by 159 basis year on year. Our share of industry ETF folios and volumes remain strong at 45% plus.

[00:07:57]Our ETF category ETF average uh daily volumes across key funds remain far higher than the rest of the industry.

[00:08:05]This quarter the industry witnessed a decrease in gold and silver ETF volumes.

[00:08:10]Combined closing AM in these two ETFs for NAM India was INR827 billion down 2.5% CO on quarter.

[00:08:20]In quarterly average terms, our gold and silver ETF represent 32% of ETF AM and 12% of mutual fun.

[00:08:29]Moving on to our digital franchise digital purchase transaction and new SIP transaction rose to 4.49 49 million in Q1 FI27 up 26% yearonear digital business contributed 78% of the total new purchases transaction in the quarter in Q1 FI27 NAM India mutual fund digital business sharpen its focus on long-term investor behavior by driving initiative to scale business and strengthen SIP habits helping rebuild confidence in discipline investing amid market volatility I would like to briefly update you on our subsidiary and gift.

[00:09:12]Starting with the company under Nepon India, we offer category 2 and category 3s and I have raised commitment of INR 95.8 billion uh across various scheme up 18% year on year.

[00:09:30]In Q1 FI27 we raised INR 2.5 billion of commitments across various asset classes.

[00:09:38]Fundraising is currently underway for our listed equity fund private credit fund and direct VC fund. Nepon India equity aperture scheme 10 which is Neoten achieved its final close and is now fully drawn down. Nepon India equity apologist team 11 completely completed its second draw down and the fund is currently 50% draw down C.

[00:10:05]Nepon India credit opportunity fund with second capital call in Q1 FI27 is drawn down to extent of 40%. On the offshore fund, our managed amum stood at INR 147 billion up from INR 139 billion in previous quarter.

[00:10:25]Moving to gift city, as stated previously, we currently have two builder funds namely Nepon India ETF, Nifty50B gift fund and Nepon India large cap fund. The EU in these funds stood at USD 48 million.

[00:10:41]Now on to our financial performance for quarter uh Q1 FI27 revenue stood at INR 7.67 67 billion up 26% yearonear and 4% quarter on quarter other income stood at INR 1.7 billion higher both YI and Q on quarter operating expenditure stood at INR 2.73 billion up 19% yearonear and 11% quarton quarter operating profit stood at INR 4.94 billion up 31% yearon year and flat quarton quarter profit after tax at INR 5.04 million up 20% yearon year and 31% quarteron quarter. With this I would like to conclude my remarks and open the floor for questions.

[00:11:33]>> Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on the touchstone telephone.

[00:11:43]If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions.

[00:11:52]Ladies and gentlemen, we will wait for a moment while the question cube assembles.

[00:12:01]To ask questions, please press star and one.

[00:12:16]>> The first question is from Mahek from MK Global. Please go ahead.

[00:12:21]>> Yeah. Hi. Uh, thank you for the opportunity and uh, congrats on a good set of numbers. So, first question was largely on the the raw expenses. So other expenses have increased uh almost 17% quarter quarter. So could you just highlight what would be the exact reason for the same?

[00:12:41]>> Yeah. So thanks M uh like uh the other expense has increase uh we continue to invest on the digital and uh brand uh and technology side. So the other expense increases mainly due to that we have uh uh investing in the technology brand activities and on on on the digital platform that has increased and we we we keep doing that that is the idea that uh we need to build uh this uh over the period mainly next to uh 6 to8 CIS in the similar fashion.

[00:13:16]>> Okay. And uh secondly sir u uh the employee expenses uh should uh should we uh so basically human has had Q1 hikes uh in in in the quarter. So should we um should this should the uh employee expense be largely in the similar range for the coming quarters?

[00:13:36]So the current quarter there is increase due to the uh uh increments which we happen in the first quarter and uh uh slightly on ESOP side and which should remain similar to the or whatever increase on the employees trend will happen will have a slight impact on the increase side but otherwise looks to be in similar range and and thank you and lastly uh sir on the SIP flows I mean your SIP flows have been quite healthy so could you just um you know call out you know which all largely I mean which funds are seeing large amount of flows on the SIP side that would be my last question.

[00:14:16]>> Okay. Yeah. So hi M this is Bad side. Uh so like in the previous calls we have been uh you know communicating that uh you know we have been broadbasing our SIT book uh you know earlier uh we had uh maybe one or two funds which had uh was anchoring the SIP book. Now uh we have diversified that uh reasonably well and hence uh even though the market is volatile we continue to increase our SIP book and uh we are also you know seeing a lot of SIP inflows coming through the fintech platform as well as through our D30 initiatives which we are doing across India. uh the branding activity which Far did speak about the digital infrastructure or support which we are getting is definitely helping us to increase our retail presentations.

[00:15:10]>> Uh got it sir and and one uh just I wanted to squeeze in one more. So uh basically given the volatility uh so are you witnessing any uh change in the behavior u with respect to direct versus uh distributed AUM or distributed sits. So if you could just give some color on that.

[00:15:35]>> What happens you know any investor who is coming in in these volatile markets the investor remains the behavior remains similar. Okay. uh yes uh the uh the uh uh trends when it comes uh DIY investors do have a different trend they tend to have shorter cycles uh but uh there is a lot of education program which is happening you know from our side to elongate uh the um uh their cycle so so that's an ongoing process but what we have seen in the last two years the quality of the digital you know native or the digital investors who are coming in is definitely improving uh from the average ticket sales from the longit you know there is definitely uh uh definitely there's an improvement happening um so so that's where we stand at at this point in time >> got it sir thank you so much and all the best >> thank you >> thank you >> thank you before we take the next question a reminder to participants that you may press star and one to join the question queue The next question is from Pra Chain from Motila Losal Financial Services. Please go ahead.

[00:16:49]>> Yeah. Hi uh good evening everyone. Uh a few questions from my side. Firstly, what has been the flows on the ETF uh uh especially on silver and gold? Uh that's question number one and how do you see kind of this panning out uh going ahead?

[00:17:07]Uh question number two is on the equity insur uh what is the kind of ground uh traction that you're seeing with respect to uh SIPs or any behavioral change in the last 3 months in the volatile environment that we've seen. Um similar question on the debt front where you know we have seen industry-wide flows weakening uh and you know do you see any revival out there u and last question would be on SIS uh what would be your plans there and product launches trajectory there those would be my four questions thanks >> uh so decide uh uh first question uh uh which pertains to the commodity side I think both silver and gold though uh you know the industry at an industry level there has been a moderation uh in the uh flows which we have seen of course on the u you know on the on on the ETF side most of the uh uh industry players have moderated these or rather restricted flows of 25 floors and plus in the ETF scheme uh the it's an interesting trend uh even though moderation has happened the industry continues to get net sales uh which is positive. We also continue to maintain our market share uh as we had previously in both gold and silver uh though volatile but the nature of investors who come in gold and silver are very different. Uh so that's the way the gold and silver is panning out. Uh I think I missed your question after that.

[00:18:45]But coming to fixed income, I think the fixed income side of the business uh uh though it has been volatile because of the interest rate movement. Uh see we have been trying to uh sort of broadbase the fixed income uh uh uh awareness in the uh amongst the investors. Uh it is all purely asset allocation which we promote in our company. uh either through asset allocation funds or uh create a pure debt portfolio from a medium to long-term point of view. Uh so maybe industry will have uh would have seen some volatility uh but we are trying to derisk the portfolio by bringing in more uh uh you know investors coming into the fixed income part of our business. Uh but yes uh there is definitely uh volatility in the fixed income uh from the industry point of view. Um when it comes to uh equity inflows I think on the equity side uh uh the uh if you if you break the break down the uh quarter gone by between April, May and June.

[00:19:51]April and May did see a moderation in the flows in the industry. June had seen a spike uh rather it moved up. uh so net net these flows uh uh are SIP plus you know uh uh it is not only SIP SIP plus lumpsum is definitely coming into the industry and hence uh it continues to be robust from our point of view we continue to have higher double digit uh uh net sales in the equity side x of index and arbitr and uh similar trend continues to be in the sales uh behavior change from a behavior change point of What we are finding is that if the you know if the performance of general performance of uh certain categories which are large cap, multicap and the larger cap categories continue to be stressful then maybe there can be moderation in times to come but uh we'll have to wait and see. As of now there is no investor concern which we have seen.

[00:20:51]Uh finally on uh SIF uh as we have been articulating I think uh uh uh we are in a state of readiness and as in when uh we uh get our uh you know approvals we'll definitely uh you know launch these funds but we would like to have a wait and watch approach in this category. [clears throat] >> Thanks for those thanks thanks for all those answer. uh one bookkeeping question I don't know if you've answered this uh the asset wise uh ease and uh what is the kind of guidance that you'll have now you know you've been a guiding for a one to two basis points ease drop every year should we stick to that and uh just uh extending that point have you passed on the complete uh complete benefit complete impact of the five basis points exit load in this quarter or is there a partial uh partial impact there >> yes sir So uh suppose the the yields are uh equity is uh 54 basis ex of arbitrage uh debt is on 25 basis liquid is 12 basis and ETF uh as a category is 25 basis overall our yield remain constant at 30 basis currently uh cont uh on on the pass uh the changes which has happened uh uh we have uh mostly passed on everything uh to the through the commission uh alignment and uh there is no impact per way on the financial >> the equity could you repeat both of the equity >> equity was 54 basis x of arbitration >> 54 >> yeah and 53 with the number which >> got that thank you so much wish you all the you we continue to uh think that uh to this uh uh pricing this thing will drop on equity as the size goes up which will be one to two basis on year on year >> one to two basis points on overall yield not on equity right again just >> okay thank you thank you so much >> thank you participants who wish to ask questions please press star and one.

[00:23:18]Ladies and gentlemen, to ask questions, you may press star and one.

[00:23:22]The next question is from Madukar from JP Morgan. Please go ahead.

[00:23:28]>> Uh, hi sir. Congratulations on a good set of numbers. Uh, first sir, uh, you know, we had restricted uh, flows to the bullion uh, ETFs. Uh, what's the, uh, update on that? uh uh do we still have the restrictions? What are the restrictions? And uh were there any changes on uh what's the plan? Can when can we uh see that being lifted?

[00:23:56]Um and second um uh what is our uh base on uh base expense ratio sorry on uh the bullion ETFs and arbitrage.

[00:24:11]uh third I'm not sure whether you covered this but uh what has uh what have been the uh trends in terms of uh net equity influ uh market share uh so uh so so you give a rough sense of what that number is so uh you know if you could uh give that and final question other income has shot up uh uh uh very strongly uh this quarter Can you give some uh explanation in terms of debt equity? What has been the big driver over here? Yeah. And how much is it?

[00:24:51]>> Yeah.

[00:24:52]>> Yeah. Yeah. Made the uh basically the uh commodity uh ETF yields are more more or less comparable with the equity numbers.

[00:25:03]So they are in more or less similar line with the equity numbers. Uh uh okay what is the second question net equity >> no and the uh bullan inflow restrictions so where are we with that and >> so on the restrictions you know I think sites side I think it was done with the backdrop more you know as from a country point of view because I think gold imports were higher it was you know I mean more from a national cause point of view but if you see what we had done was also we restricted inflows in the excess of 25 crores uh and uh in our gold fund which is not ETF gold fund uh uh above 10 lakh rupees. So broadly the retail flows still continue. It is only some people uh investors who used to take trading calls and other things for short term I think restricted that. So our idea is our retail from a retail franchise point of view our retail investors continue to have an access to commodities. um and to your question on when will we open it I think will be difficult to give a um date or this thing but I think in looking at the overall environment but uh good thing is because this was voluntarily done by the company u we continuously keep evaluating and may you know uh sooner than later operate >> coming to coming to equity flows mandar the as I mentioned earlier the equity flows continues to be uh uh rather For us, quarter on quarter there's an improvement. Uh last quarter it was higher single digit. This time this quarter it has been higher double uh in the double digit range. Uh x of you know index and arbitrage. uh good part is the NFO market has shrunk uh because of uh less euphoria in the market that uh is good for the industry and you know that's how we would like to continue uh that uh you know we don't launch in a pool um uh coming to uh B I think >> yeah any other point which is pending >> the other income uh perhaps So, so the other income is mainly driven by the market movement mainly on equity side and softening of interest rate on debt. So that >> yeah when I look at your investment book equity is not very large in the investment book right so uh that was what my confusion or maybe I'm missing anything of this >> so we we have a large portion of small and midcap maduk so the portion of midcap in our book is higher as a seed capital so which has given the benefit to us >> understood understood and Uh final thing just coming back on the uh you know gold u uh ETF index fund. Um see these are normally supposed to be backed by uh physical gold. So given the current environment um how are you sort of arranging for gold? Uh I mean is there enough supply in the domestic market or you import it?

[00:28:20]Uh how does that work?

[00:28:23]So as per se rule I think you're right everything has to be backed by physical and yes we have not seen any disruption uh during this period and uh uh and otherwise we will not be able to take any inflows the fact that the inflows continue and every incremental rupee that comes in is backed by gold. So we do not see any disruption in supply chain.

[00:28:44]>> Got it sir. Uh congratulations on a great set of numbers and all the best sir. Thank you.

[00:28:49]>> Thank you.

[00:28:52]Thank you.

[00:28:54]A reminder to participants that you may press star and one to join the question queue. The next question is from Rohan Nakpal from Helios Capital. Please go ahead.

[00:29:07]>> Uh hi, thanks for taking my question. Uh just uh a clarification on the other expenses. Um so I gathered that um you're investing more on the technology front and um certain other investments.

[00:29:21]Um is this the is this the run rate that one should expect uh from this point onwards or are there certain expenses that will continue that you anticipate continuing for a certain period of time before they go back to an earlier level.

[00:29:34]Just want some clarity on that. Mr. Ro, we will keep on investing for some time because we think that there is a requirement to do uh investment on these. So maybe for six to eight quarters we will keep on investing in in the range of you can see a rate of 18 to 20% of their expense uh increase in next 6 to 8. Yeah. Overall expenses other expenses >> understood. Okay. Uh that's it. That's it from my side. Thank you very much.

[00:30:07]Thank you. Participants who wish to ask questions, please press star and one.

[00:30:18]The next question is from Chain from Motilos Financial Services. Please go ahead Mr. P Shane. You may go ahead with the question.

[00:30:34]>> Yeah. Uh can thank for the opportunity again. Uh asking on the overall expenses front uh how should we think about uh the overall expense growth? You've been guiding for about a 15% growth uh overall expenses. Uh so is that the guidance that you would like to stick to for the next one or two years? Um and uh second second question sorry so sorry for that. Uh second question would be uh again on you know SIS you just mentioned that you know you have uh so are the application for products being filed with regulator or they're still in the process and there quite a few things that are developing in the industry uh with with regards to SIF now there are some distributor regulations also examination regulations also that have been changed uh you know mutual fund and SIF examination to be merged. All those regulations are also being changed. Uh so definitely I think the industry is seeing this as a recent opportunity. Uh is it that we are just still waiting and observing or uh the the pipeline is very clear for us and again on the international front um you know uh any any new developments or any uh new geographies that you're getting into or any scale up or new launches that you're going to look at in the new ones.

[00:32:03]>> Thanks. So I think regarding uh regarding SIF I think as uh uh my colleague Sabata mentioned earlier I think we're in a state of readiness I think rather than getting into the nitty-gritty of what stage we are with the product and all I think we are overall I think in a state of readiness we are ourselves believe I mean like you we remain very optimistic on the space but we also feel uh typically a lot of products which have been launched initially by the industry uh they are very you know I mean uh um they're the meto kind of a thing, you know. Uh I mean most of them are very similar. I think they're just mutual fund plus. I think we believe I think that I think this is a category because we have a very big retail franchise on the mutual fund side. We want to be very clear that I think the products we're going to be launching are very highly differentiated and uh from pure mutual fund play and um so you'll see us I think we already have a senior colleagueuh Andrew Holland and his team on board. they're working on various things. So you will see us you know launching and come and we will be for us this will be a very important business strategy going forward. I think that's the only thing I can mention. I think point number one. Uh to your second question of international um there are a lot of things are happening.

[00:33:17]I mean I mean uh I think both you know for us two markets remain critical. uh one is uh Japan um being our home country there and on the other side a recent uh uh GB that we have announced for our AF business with DWS. So there are a lot of things happening uh starting from launching of funds uh and also approaching institutional investors.

[00:33:42]Some of these things are binary zero one they take time to happen. Uh maybe in the subsequent uh earnings call we'll have something more concrete to share but I think specifically and I like to touch on the JB DWS we believe I think from Europe a lot more money can come to India and uh DWS is the largest asset manager of Europe and the JV has been done with that in mind. Yeah and a p uh just to correct my earlier this thing uh the overall expenses we are expecting to go in the range of around 18 to 20% because we'll do the investment on uh technology and brand uh which will be exop and any one of if there are Yeah, sorry. Yeah, thanks for that. Just you know the extension to that question on ESOPS and ESOPs should be declining by OI on FI27.

[00:34:51]Uh the present as we go uh the present ESOPS you know going by that logic uh yes it will decline here on air.

[00:35:01]Okay. Okay.

[00:35:03]and just a unit economics on DWS if you can highlight something uh whether you know what kind of deal and what kind of uh money that we can make on this anything that you can share right now or it's too early to comment on that >> I think it will be too early I think I we see a very big opportunity there uh we have just you know we are awaiting regularity approvals you know because we as announced at the stock exchange uh I think we have got into it DWS will be taking 40% stake in our AF subsidiary um and from our point of view the key to that is basically u I think we are very strong domestically uh in India we have very strong Japanese you know I mean access you know but Europe access was you know and we will become one of the unique asset management companies in India where um on one side it will be Europe and one side will be Japan and as India and this is also going to be function of as India becomes more uh important for global investors you know h I I think we believe we have a a better edge compared to others to get this foreign money into India.

[00:36:11]Okay. Okay. About that. Thank you so much for all the detailed answer.

[00:36:14]Thanks.

[00:36:17]>> Thank you. The next question is from Abijit Sakare from Kotak Securities.

[00:36:23]Please go ahead.

[00:36:25]>> Hi uh good evening everyone. Uh so I had a couple of questions on flows. So if you could uh kind of highlight uh like incremental flows in terms of uh channels if if there is any uh skewess towards direct uh versus the other intermediated channels and we've generally seen uh for the industry the banking channel has been relatively weaker. So anything to read across that you're seeing at a at a broader industry level and specifically to Nepon?

[00:36:59]>> Yeah. So uh I I'll answer the second question first. Uh from a channel uh uh perspective the banking channel see what are what happens uh to manage the banking channel you need the right experience and the uh uh and the geographical reach. Uh so from from our perspective we have seen uh incremental flows are only steady uh you know uh in the banking channel and we have a widespread of banking interface which we have across PSU private sector and the MNC. So from our perspective we have not seen any sort of trend lines which is uh showing any [clears throat] uh moderation. Um uh the uh uh uh just second the other question was on uh percentage share of direct to regular uh the direct flows have have insted up a bit uh because of uh the fintech platforms uh having a very uh high inflow of ships coming in from the fintech platform. So definitely the direct uh uh inflows uh new inflows coming to our funds on the equity side has start started inching up. Uh the distribution piece also continues to be strong from our end. So we are able to balance out uh the uh uh balance out the uh you know distribution of flows both into direct and regular plan. M I think I just like to add one more thing you know since uh we talked about the banking channel while I think uh for us we have always stated as a risk management uh we have always a very strong uh d-risk uh business model same is true for distribution no distributor for us no single distributor is more than 5% and we have a very high uh percentage which comes from MFDs so I think it is a very well diversified portfolio uh distribution portfolio Got it sir. Um and uh like with the digital channel generally the the perception is that it's a channel which is always chasing performance relative to other channels. Uh but uh when it comes to let's say the market volatility is there a like a different trend in in the sense that you know the digital channel is is more sort of by the dips versus the intermediated channel. Is there a like a color there?

[00:39:29]>> Hi. Uh thanks for your question. Uh I'm Aran. Uh so I think it's it's all about the way you would want to uh run your campaigns across your digital channels because uh you know it's also one of our imperatives that we educate our customers. Uh so in a time of this uh it's not that everyone comes to buy because if you see that the digital infrastructure is mainly visited by the Gen Z's more than anybody else. So this trust process and the confidence that we've been able to build up across our infrastructure uh be it digital distribution or through user growth that helps us to uh educate the customers in the right way. So volatility uh while it might have uh its own measures but we put the counter measures in place so that you know at every year every month or every day um has to be uh you know on the basis of trust and process. money which is long-term investing and we help them through digital platforms by nudges by campaigns. So we are there 360 across the customer. So so we have we have also incorporated such stuff you know if an investor comes in for redemption we actually you know make them uh realize that redemption is not right uh you know that education process is very robust at our end. So that actually protects uh and the shortages to quite an extent.

[00:40:52]That's correct.

[00:40:56]>> Got it sir. Um and just sorry one more follow up on the flows. Um in terms of the funds where which which are attracting uh strong inflows u those continue to be the the the same uh funds primarily small multi uh and large cap or is there a like a difference?

[00:41:18]>> Yeah. So we have small cap, we have large cap, we have multi cap, we have midcap, we have multiasset allocation fund. We have a large and midcap fund.

[00:41:24]Uh we have the sector funds which are giving us inflows now because the NFOs are not coming. Now the traffic is moving to the secular uh you know sectoral funds which we have for 15 20 years in our company. So we have a very well diversified flow which is coming to our funds.

[00:41:42]>> Got it sir. Um and then one data question uh if you can quantify the absolute revenue or the contribution from non MF products in this quarter it is in the similar range around 88% gross gloss >> 8% of gross revenu when we uh on the AIF products do we incur manage management fee on the commitment amount or the investment invested amount.

[00:42:18]>> Hi, this is Ashwin. So this uh depends on the strategy that you are running. So in a typical PDC fund mostly you charge the management fee on catchup while when we do a a private credit kind of a fund okay or a cat 3 fund that's mainly on the draw downs.

[00:42:39]>> Understood. Okay that's all from my side. Thank you.

[00:42:43]Thank you. The next question is from Shrias Temple from the Mura. Please go ahead.

[00:42:51]>> Hi team, thank you for the opportunity.

[00:42:54]Uh I had a question on performance. Uh obviously we have had a good uh performance uh in last one quarter. Uh probably that is why um we have seen a better quarterly average AUM growth uh versus peers also. Uh can you highlight uh some metric that can be tracked in order to uh uh you know see and track the performance uh of the funds that we have.

[00:43:25]>> So I think I'd like to uh take this question a little differently. I think first I think the performance has been there over a a longer period of time and um I think and I will performance remains a very important parameter but I think the way we uh see ourselves uh for us there is a lot of input matrices that we I think uh try to you know monitor closely which we believe these kind give the kind of results you know uh there are 17 factor analysis which you know I think um the PDCA process which was started about uh 78 eight years back uh by Nepon life you know from nippon life risk management and that has been helping uh and when I say help it's making it more consistent because otherwise uh there it performance is not a flash in the pan but I think it's more you know if you see it's been a very long sustainable you know and as we talk today I think argue the number uh 90 to 95% of the AF is in quartile one and two so that is one we I think will also like to uh touch you know as a company performance remains important but you will never see us talking about performance uh for us you know all our advertisements are about trust and processes you know so the reason why I'm trying to touch this point is I think we are trying to build a franchise where performance will remain important but will may not necessarily be the selling point >> understood sir um the second question was on uh uh the ESOP expense. Uh as far as I remember uh there are two uh ESOP expenses uh the first old one and the new one. Could you please quantify if there are any changes uh in the uh ESOP expenses that we will have or uh uh are they the same?

[00:45:21]So the expense for the quarter is around 13 13 and over the period it should be in the range of around 60 odd per year.

[00:45:38]>> So for for FY27 you're saying 60 Ks 60 for the year.

[00:45:47]>> Got it.

[00:45:49]Yeah, those were my questions. Thank you.

[00:45:53]>> Thank you.

[00:45:57]>> The next question is from Mohit Mahal from Central. Please go ahead.

[00:46:02]>> Uh yeah, good evening everyone and uh congratulations on a good set of numbers. The first question is on this 50. So we saw corporate you know accounting for around 37%. Now if I look this number five years back this used to be around 50 odd%. Uh so it's fair to assume that you know that retail has overcome corporate and this trend expected to continue.

[00:46:26]>> I think I think your reading is correct.

[00:46:27]The way I would like to see it is um the I think because of our reach uh today I think uh it is the retail part is becoming bigger day by day. you know I think the fact I think 99% of the um 100% districts of India 99% of pin codes of India I think we've been able to reach uh both whether physically or digitally you know I think uh which is the reason the corporate looks to be shrinking as a percentage but uh the good thing is both uh both uh in the retail and corporate in absolute terms continue to grow understood this is helpful now coming to flow I think you know your opening comment says that like BCAP is one where we have kind of received you know very good flow now this is kind of you know very uh young schemes you know at our portfolio level with AM also being low whereas large and multi-asset kind of schemes are more than 500 billion uh so just wanted to know how how have been the flows in sector >> yeah so uh you're right the flexi cup from our side is relative ly new and you know last two three years the markets two years the markets have been volatile.

[00:47:45]What uh you know uh but the other category the large and midcap category is a more stable stable category. uh we have a very unique positioning of the of our vision fund uh in that uh space and uh hence we have been able to now incrementally build our uh flows in the larger midsap flexiap we will uh it'll take us some time because uh we would like the market to be more stable uh and therein the ability for the fund manager to keep uh you know have a nimblefooted approach towards flexi cap strategy really helps. Uh so so for us it will be vision fund and then maybe flexi gap in times to come. Uh so we uh we also would like to you know share that even though that category is large uh you know most of the uh players in that category are large cap biased and hence probably uh from our perspective we would like to be true to the label and uh even though it leads uh it may lead us to be uh lower in the uh performance rankings we would not not like the mandate of the fund to change to attract flows and we have enough funds to play the large cap space.

[00:49:03]>> So this is very helpful and all the best.

[00:49:06]>> Thank you.

[00:49:09]>> Thank you.

[00:49:11]>> The next question is from Ragshar from JM Financial. Please go ahead.

[00:49:18]>> Hi sir, thanks for the opportunity. So I essentially wanted to double click on the AIFS payments please. So uh so first uh uh hygiene so the entire thing except the offshore business comes in the standalone >> no so AIS is a different subsidy and offshore is a different subsidy >> and and the PMS but it comes in the >> PMS is a part of the >> okay and at say around 60 60 odd crores of uh you know revenue in a quarter I I assume half of that would be going towards uh you know fem expense. So are we break even and what is the path to break even there if if we are not and for your view when does it really become a significant contributor to bottom line?

[00:50:04]>> Yeah. So it's a profitable company.

[00:50:07][clears throat] Yeah. It's a profitable franchise. It's a bad positive company.

[00:50:12]>> Yeah. You can see our financial I put it on the website.

[00:50:16]>> Okay.

[00:50:18]Okay.

[00:50:20]Uh okay. And secondly on the the fintex like the largest print there gives out it you know the second growth. So over there how is does our market share trend and is it very volatile or is it stable at say somewhere around the 10% which is our market share across the board.

[00:50:37]>> No I think uh hi Aran over here I think we have been able to uh spread our distribution across uh the digital ecosystem where fintex is just a part of it and uh and that is how we want to be.

[00:50:50]All right. And we ensure that there is the there is kind of an equitable distribution even across fintex uh market share. Yes, we tend to stay on the top three on the fintech space. Uh and and I think that's the way it's going to be in the times to come.

[00:51:08]>> Okay. Thanks. Thanks for the >> Thank you very much.

[00:51:15]>> That was enough. I would now like to hand the confidence over to the management team for So uh thank you thank you all for taking uh taking out the time to join us on the call today. If there are any queries uh we shall we will be happy to address the same over this call. Thank you.

[00:51:38]Thank you very much on behalf of Modilos Financial Services.

[00:51:43]That concludes the conference. Thank you for joining us ladies and gentlemen. You may now disconnect your lines.