Top 20 MF distributors account for 56% of industry commission in FY23

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The mutual fund distribution channel seems to be as concentrated as the industry itself, with the top-20 distributors accounting for 56 per cent or ₹6,739 crore of the overall commission of ₹12,049 crore in FY23.

Interestingly, the top-10 distributors earned ₹5,734 crore as commission last fiscal. Among the top-10 distributors, six are banks with interest in mutual fund business through their subsidiaries, according to AMFI data.

Similarly, of the ₹43 lakh crore of assets under management (AUM) in the mutual fund industry in the June quarter, the top-10 fund houses account for 80 per cent or ₹34 lakh crore, with the AUM of SBI MF and ICICI MF standing at ₹8 lakh crore and ₹5 lakh crore, respectively.

Started by two first-time entrepreneurs, Niraj Choksi and Jignesh Desai, NJ remained the top mutual fund distributor for the eighth straight year with its commission earned jumping 19 per cent last fiscal to ₹1,539 crore.

Its assets under management grew 13 per cent to ₹1.24 lakh crore against ₹1.09 lakh crore logged in the preceding fiscal.

The commission earned by Ahmedabad-based NJ has grown steadily over 10 times from ₹150 crore registered in FY’14. Established in 1994, the AUM of national MF distributor, NJ, has seen a massive jump from ₹11,900 crore in FY’14.

NJ earned most of its commission from SBI MF, HDFC MF, Nippon MF and Axis MF.

Another Ahmedabad-based distributor, Prudent Corporate Advisory Services earned a commission of ₹583 crore last fiscal against ₹440 crore in FY’22, an increase of 32 per cent. The biggest contributors to Prudent’s earnings were HDFC MF, ICICI Prudential MF, and SBI MF.

ICICI Securities, IIFL Wealth and Bajaj Capital saw their commission fall to ₹380 crore (₹390 crore), ₹120 crore (₹140 crore) and ₹80 crore (₹90 crore).

Interestingly, among the details of commission paid to 1,781 distributors released by AMFI, the share of smaller distributors has gone up, aided by a strong inflow through systematic investment plan.

Inflows through SIP jumped 25 per cent last fiscal to hit a new high of ₹1.56 lakh crore against ₹1.25 lakh crore on the back of the bullish trend in the equity markets.

Santosh Patwardhan, an independent distributor, said the response from investors from smaller towns to start an SIP was very encouraging, given the kind of return equity investments delivered last year.