Zerodha gets Sebi nod to open asset management biz

economictimes.indiatimes.com:

Zerodha has received the final approval from market regulator Securities and Exchange Board of India to launch its asset management business,CEO Nithin Kamath announced on Friday. It is launching the asset management company in partnership with Smallcase, which was incubated within Zerodha's in-house corporate fund Rainmatter. In April, both Zerodha and Smallcase had announced that they would form a joint venture to launch the Zerodha AMC business. In a message posted on the X social media platform, Kamath said there were two reasons that motivated Zerodha to launch an AMC. The first was that even after so much growth over the last three years, there are only around 60-80 million unique equity investors.

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The second was the need for the market to have simple products so that the next 10 million investors could enter into this space quickly. «They needed simple products they could understand, and mutual funds were a perfect instrument,» Kamath said. The company also confirmed the appointment of Vishal Jain as the new CEO of its AMC business. Jain is a veteran manager of the exchange-traded fund industry and was at Nippon India Mutual Fund for five years before joining Zerodha. The company could launch its first fund offer pretty soon, Kamath said. An asset management company launches its own mutual funds, which can be sold through distributors or direct channels. Zerodha, all these years, has been a distributor of direct mutual funds. It ran a platform named Coin for this business. Another fintech company that has set up its own AMC business is Sachin Bansal-promoted Navi. Navi acquired Essel Mutual Fund to get its