Sebi trains guns on fund houses encouraging bonus stripping

Mutual fund houses, pushing schemes by informing investors that there will be a dividend or bonus payout in the near future, have come under the radar of the Securities and Exchange Board of India (Sebi). Sectoral sources say the regulator is in the process of accessing emails and WhatsApp messages being sent to investors by fund houses. "A couple of fund houses have been aggressively pushing schemes through this method. Sebi has sought details from distributors to establish a case against errant fund houses," confirms a player. The Association of Mutual Funds in India, had asked fund houses not to encourage bonus stripping but some have continued to do so.

Fund-raising activity gains traction in June

Equity capital raising activity has seen a sharp uptick in June, despite choppy secondary markets due to consistent selling by foreign investors. So far in June, around Rs 6,000 crore worth of equity has been mobilised through three deals, including the IndusInd Bank qualified institutional placement (QIP). In comparison, only transactions worth around Rs 2,000 crore took place in May. With the number of initial public offerings being lined up, investment bankers believe that fundraising through primary market will also see a spike in the second half of 2015.

Exit-wary CEOs

The exit of a high-profile fund manager has brought star-driven fund houses back into sharp focus. It should come as no surprise if chief executives, who have banked on a single prominent fund manager to drive sales, are now taking steps to minimise the risks of an asset outflow should there be an untimely exit. The head of a major mutual fund house has been spreading out fund management responsibilities. The idea seems to avoid being overly dependent on just one person.

Whether this has always been the strategy as the chief executive officer claims, or a reaction to recent exits is unclear, but other MF heads are paying close attention to the trend.