Cap on TER could hit HDFC AMC, Reliance Nippon earnings by 17-25% in FY19

Viewed as the best proxy of the financialisation theme, the initial public offerings of both asset management companies (AMCs) — Reliance Nippon Life Asset Management (RNLAM) and HDFC AMC — were a hit. However, what investors often forget is the regulatory risk—changes brought about by the markets regulator (Securities and Exchange Board of India or Sebi) and the impact it could have on the sector. 

After the close of markets on Tuesday, Sebi capped the total expenses ratio of AMCs with equity assets up to Rs 500 billion from 1.75 per cent to 1.05 per cent. This led to a sell-off