Fee cut to dent mid-, small-sized funds' profitability by Rs 200-400 mn

Fund houses making minimal profits to feel the pinch

The Securities and Exchange Board of India’s (Sebi’s) decision to bring down the overall total expense ratio (TER) could lead to near-term pain for smaller fund houses. According to industry experts, the revised TER structure would impact the profitability of mid- and small-sized fund houses by Rs 200-400 million.

Experts say there are still at least eight fund houses making profits of less than Rs 100 million. These fund houses could feel an immediate impact on their operations when the new structure comes into effect, they add. As things stand, as many as 11 fund houses are already making losses.

Sebi last