AMC Stocks Price Surge as SEBI Approves Changes in MF Rules: HDFC AMC, Nippon Lead Gains

Mumbai, December 18, 2025: Share price of asset management companies (AMCs) rallied in Thursday’s trade after the Securities and Exchange Board of India (Sebi) released the final mutual fund expense ratio (ER) structure, which turned out to be far more relaxed than what was expected earlier. Relaxation in the reduction of the fee cuts and higher brokerage caps than expected helped ease the pressure, lifting the shares of the sector by 4-7% in the trading session.

SEBI Eases Mutual Fund Fee Cuts to 10 Bps from 15 Bps, Alleviating Margin Concerns

The rally came after the Securities and Exchange Board of India (SEBI), at its meeting held on 17 December 2025, approved a revised mutual fund charges structure aiming to bring in more transparency without disturbing the asset management industry. The biggest relief was the proposed softening of the cut in the Total Expense Ratio (TER).

In its October 2025 discussion paper, SEBI had proposed a reduction of 15 bps in TER, which had resulted in a 4-5% correction in AMC stocks at that time. The impact on fund house core earnings, particularly for large and mid-sized AMCs, is minimal as the final framework reduces the fee to 10 bps.

SEBI also removed the additional 5 bps expense allowance linked to exit loads. However, analysts said the markets had already priced in the removal after the October consultation.

BER Tax Separates the Tax Effect, Makes Costs Transparent

One structural change under the new regime is the replacement of TER with Base Expense Ratio (BER). As stated in the new norms, statutory levies like Goods and Services Tax (GST), stamp duty, Securities Transaction Tax (STT), Commodity Transaction Tax (CTT), exchange fees and other regulatory charges shall not be included in the BER and shall be collected separately on an actual basis.

This limit changes the scope of expenses that are subject to limitation to permit specific fund-level expenses, including management fees, distribution brokerage and registrar and transfer agent (RTA) fees to be separately disclosed from statutory remittances. The amendment offers relief from ” double charging” and clarity to retail investors with no material impact on AMC margins.

Brokerage Limited to 6 Bps for Cash Segment Trades

SEBI maintaining high brokerage caps than what had been suggested earlier was another big trigger for the rally. Brokerage costs in the cash market have been limited to 6 bps from around 12bps earlier, though it is far more than the 2bps suggested in the Oct paper. For derivatives, the cap has been reduced from 5 bps to 2 bps as compared to the suggested 1 bps.

Market analysts are of the perception that there may be a possible decrease of between 10-15bps in the average trading costs incurred by fund managers. This is in contrast to the significant reduction in the initial projections. The regulator made it clear that statutory fees are to be excluded from brokerage to avoid any operational limitations.

Key AMC Share Price Snapshot

HDFC Asset Management Company Ltd (NSE: HDFCAMC) rose 7.27% to ₹2,726.00. The scrip touched an intraday high of ₹2,728.50 against an opening price of ₹2,602.90. The firm has a market cap of Rs 1.17 lakh crore and is trading at a P/E of 42.58.

Canara Robeco Asset Management Company Ltd, which was recently listed was 6.62% higher at ₹305.20, with intraday volumes surpassing 5.34 million shares. The stock was volatile in trading session as it reported day low at ₹294.60 and day high at ₹313.90 and currently it has a market capitalization of around ₹6,086cr.

Nippon Life India Asset Management Ltd gained 3.46% to Rs 895.00 with total number of traded shares nearly 85 lacs. The stock traded in the range of ₹881.00 and ₹934.00 intra-day and much below its 52-week high of ₹987.35. The business continues to have scale advantages that allow it to weather small fee reductions with a market cap of Rs 57,014 crores. 

The final mutual fund regulations issued by the SEBI have removed the regulatory uncertainty by weakening the cuts in the fees, distinguishing the statutory dues from the base fees and allowing a reasonable limit to the brokerage fees. The system offers a balance between transparency for the investors and feasibility for the AMCs and helps to achieve a streamlined fee structure for schemes involving equities, debt, ETFs, and FoF products without disturbing the economies.

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