Brokerage firm Zerodha on Wednesday received market regulator SEBI's in-principle approval to start its mutual fund business, said Nithin Kamath, founder and chief executive officer of the company.
Taking to Twitter, Kamath posted, “So, we just got our in-principle approval for our AMC (MF) license. I guess now comes the hard part."
Zerodha had applied for a licence to start its asset management company (AMC) in India in February 2020, a month before Covid-19 pandemic hit the country.
"To grow the capital market participation from the current 1.5 crores and address those who currently don't invest (Millenials), we think mutual fund as a product needs to be reimagined. So yeah, we have just applied for an AMC (Mutual fund) license," Kamath had said in February 2020.
Earlier this month, financial services company Bajaj Finserv had announced that SEBI had given its in-principal nod to the company for sponsoring a Mutual Fund. The company would also be setting an Asset Management Company (AMC).
The SEBI approval for the mutual fund business for Zerodha comes at a time when MFs have become a popular mode of investment with the industry's assets under management (AUM) surging to an all-time high of ₹35 lakh crore in July-end.
Earlier today, asset management company True Beacon launched a new alternative investment fund, which will invest in equity and tax-free bonds, Kamath had said.
He, further, said the new fund will be ideal for new investors who are looking to scale equity exposure.
The fund will invest in the country's largest 200 companies to capture value appreciation combined with a sovereign-backed debt component to hedge against inflation and volatility.
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Zerodha gets approval to launch mutual fund business: Nithin Kamath - Mint
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