Ladies and gentlemen, good day and welcome to Nippon Life India Asset Management Limited Q2 and FY 2026 earnings conference call hosted by Incred Capital. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Meghna from Incred Capital. Thank you. And over to you, ma'am.
Thank you, Ikra, and good evening to everyone. On behalf of Incred Equities, I welcome you all to Nippon Life India Asset Management second quarter FY 2026 earnings conference call. We have with us Mr. Sundeep Sikka, Executive Director. We are thankful to the management for allowing us this opportunity. I would now like to hand it over to Mr. Sundeep, sir, for his opening remarks. Over to you, sir.
Thank you. Good evening and welcome to our Q2FY 2026 earnings conference call. We have with us our CFO Parag Joglekar, CBO Saugata Chatterjee, Deputy CFO Amol Bilagi, Chief Digital Officer Arpanarghya Saha, Head of AIF Ashish Chugani, Deputy Head of AIF Aashwin Dugal, and Shin Matsui-San, Nominee of Nippon Life Insurance, Japan. I would like to share key highlights of our performance and post that I will hand over to Parag to speak in greater detail on the recent industry trend as well as our performance post.
Which we will move to Q and A.
Coming to the key highlights, I would like to start by mentioning that NAM India has achieved its highest ever quarterly operating profit at INR. Further, NAM India was the fastest growing AMC in the top 10 AMCs in H1 FY 2026.
This led to an increase in our.
Overall AUM and equity market share.
We have had the highest increase in.
AUM market share in the industry in H1FY 2026. Our market share at 8.51% is the highest since June 2019. Importantly, both equity sales market share and SIP market share remain well above our equity AUM market share. Our SIP market share was again greater than 10% in September 2025, and our equity net sales market share was in the high single digit for the quarter. Also happy to share, the Board of Directors have declared an interim dividend of INR 9.00 per share along with the Q2FY 2026 results. Now I will hand over the call to Parag for further details on the industry trends and our performance.
Thank you, Sandeep. Let me start off with the markets. Equity markets for Quarter 2 FY 2026 witnessed a decline from prior quarter levels. The Nifty decreased by 3.6% QoQ while the Nifty mid and small cap indices decreased by 4.3% and 6.2% QoQ respectively. The repo rate was stable at 5.5% while the 10-year GSEC yield increased by 25 basis points QoQ to 6.5%. Coming to data on the mutual fund industry, industry quarterly average AUM grew by 16.5% YoY and 6.9% QoQ in Q2 FY 2026 to INR 77.1 trillion. The share of equity in overall AUM increased marginally QoQ, ending at 56.8% for Q2 FY 2026 from 56.6% in Q1 FY 2026. Now, moving to the industry flows, the equity category excluding index fund and arbitrage fund witnessed a gross inflow of INR 2.62 trillion and net inflows of INR 1.41 trillion. Both gross inflows and net inflows were higher QoQ.
Categories with the highest inflows were Flexicap, Small Cap, and Mid Cap funds. The fixed income category witnessed a net outflow of INR 28 billion in the quarter after the net outflow in the prior quarter. The ETF categories had a net inflow of INR 317 million. Moving on to SIP, industry SIP contribution for the quarter was INR 861 billion, up 21% YoY and 7% QoQ. Monthly SIP flows in September 2025 stood at INR 294 billion, an all-time high. Further, contributing SIP folios increased by 6.1 million, that is 7% higher to 92.5 million for September 2025 over June 2025. At the end of the quarter, unique investors in the mutual fund industry increased to 57 million. That is an increase of 14% YoY. Now, moving to our business performance, we closed the quarter with a total asset management of INR 7.61 trillion.
This includes mutual fund managed accounts, offshore fund, and GIFT City funds. Our mutual fund quarterly average AUM grew 19.5% YoY and 7.1% QoQ to reach INR 6.57 trillion. We were the fastest growing AMC in the top 10 in H1 FY 2026 and had the highest increase in quarterly average AUM market share in H1 FY 2026 among all AMCs. I would now like to share a few key highlights for the quarter, starting with the market share. Our market share increased 22 basis points YoY and 2 basis points QoQ to 8.51%. Our equity market share increased 17 basis points YoY and 9 basis points QoQ to 7.13%. The share of equity AUM in our overall AUM increased by 0.7% QoQ to 47.6%. For Q2FY 2026, we achieved a high single-digit market share in net sales in the Equity plus Hybrid segment.
In Q2FY 2026, we continue to have the largest investor base in the mutual fund industry with 21.9 million unique investors. We are humbled to have over one in three mutual fund investors invest with us during the quarter. We also completed the NFO of Nippon India MNC Fund, which collected INR 3.8 billion. I would also like to touch upon some important aspect of our systematic book. I am happy to share that there has been continued momentum in our systematic flows. Our monthly systematic book rose by 16% year -on- year and 10% quarter-on- quarter to INR 36.4 billion for September 2025. This resulted in an annualized systematic book of INR 437 billion. SIP market share stood at 10.02% for September 2025.
Moving on briefly to the ETF segment, we continue to be one of the largest ETF players with AUM of INR 1.83 trillion and a market share of 19.77%, which increased by 160 basis points year-on- year. Our share in the industry ETF folios is 50%. We also have 49% share of ETF volume on the NSE and the BSE. Our ETF average daily volume across key funds remained far higher than the rest of the industry. The industry witnessed a surge in gold and silver ETF volume in the quarter. In terms of closing AUM, NAM India Mutual Fund Gold ETF was up 36% quarter -on- quarter and the Silver ETF was up 89% quarter -on- quarter. Combined AUM in these two ETFs was INR 450 billion as of 09-30-2025.
In Q2FY 2026, we launched three new products: Nippon India Nifty One Day Liquid ETF, Nippon India Nifty India Manufacturing ETF, and Nippon India Nifty India Manufacturing Index.
Fund.
Moving on to our digital franchise, digital purchases transaction and new SIP register rose to 4.2 million in Q2FY 2026, up 18% year-on- year. Digital business contributed 75% of the total new purchases transaction in H1FY 2026. Nippon Life India Asset Management continues to strengthen and enhance its digital capabilities to meet the ever-growing needs of today's tech-savvy investor. Our focus remains on providing best-in-class digital experience to our customer with constant addition in features and capabilities across journeys. Now I would like to briefly update you on our subsidiary and Gift City, starting off with AIF. Under Nippon Life India Asset Management AIF, we offer Category II and Category III AIFs and have raised cumulative commitment of INR 87.2 billion across various schemes, up 30% year-on- year. In Q2FY 2026, we raised INR 6.2 billion of commitment across various asset classes.
Fundraising is currently underway for two of our listed equity, residential RE fund, and direct VC fund. Fund deployment across all the strategies was robust in the quarter with 12 active investments in performing credit and full deployment in our venture capital FOF across 14 funds with underlying exposure to 410+ startup companies. Our future product pipeline includes Nippon India Credit Opportunity Scheme 2, Second Performing Credit Fund. On the offshore front, assets under management grew 6% in H1FY 2026 to INR 161 billion with inflows coming in from various geographies in Asia, Europe, and Latin America. We continue to expand our footprint in the Japanese institutional and retail markets. In conjunction with Nissay Asset Management Corporation, Japan, we also continue to expand our footprint in the new geographies in the Asian, European, and Latin American region.
Moving to Gift City, as stated previously, we currently have two feeder funds, namely Nippon India ETF Nifty 50 GIFT Fund and Nippon India Fund GIFT UMS. These funds more than doubled quarter -on- quarter to USD 31 million. Now onto our financial performance for Q2FY 2026. Revenue stood at INR 6.5 billion, up 15% YoY and 8% quarter -on- quarter. Other income stood at INR 0.37 billion, down 70% year-on- year and 75% quarter -on- quarter. Operating expenses stood at INR 2.39 billion, up 16% year -on- year and 5% quarter-on- quarter. Operating profit stood at INR 4.19 billion, up 15% year -on- year and 11% quarter -on- quarter. Profit after tax stood at INR 3.45 billion, down 4% year -on-year and 13% quarter-on- quarter. For H1FY 2026, operating profit grew by 18% year-on- year. Profit after tax grew by 7% year-on- year.
Further, the Board of Directors has declared an interim dividend of INR 9 per share along with the quarterly. With this, I would like to conclude my remarks and open the floor for questions. Thank you.
Thank you very much. We will now begin the question-and- answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Pratik Jain from Motilal Oswal. Please go ahead.
Yeah, hi, good evening everyone. Firstly, on the regulatory change, the consultation paper, what are your thoughts as to what could be the impact if it is implemented as it is? That would be my first question.
You want to continue with all your questions? You know, we can answer it together.
Sure, I'll do that. Second is from an industry perspective. From an industry perspective, the fifth category is kind of seeing a lot of launches by everyone. What are your thoughts as to, you know, where kind of Nippon Life India Asset Management play a role in that? Thirdly, if some bookkeeping standpoint, could you give us the ease on the various asset classes that will be attachments.
Hello, ladies and gentlemen, the management line has been disconnected. Please hold on while we get them reconnected. Ladies and gentlemen, thank you for being on hold. The management has been reconnected. Thank you. Over to you.
Hello, can I repeat the questions?
The second question you had, first one I noted. The second one please.
Yeah, the second question was on the SIF category where we've seen quite a few launches, a couple of launches in the industry. What are your thoughts and what are the plans there for that particular segment? Do you think that this segment can be a big segment going ahead upon a setting of a separate team? What are the thoughts there? The third is the bookkeeping question on, you know, what is the yield, realized yields across the category, equity, hybrid, equity debt, and liquid and others.
I'll take the first two questions.
I'll request Parag to take the third one. I think the recent SEBI consultation paper which has come on October 28, firstly, let me say the regulator has been continuously taking steps in the interest of the industry and it seems to be the step. I think while we need to look at the paper holistically as it seeks to enhance regulatory clarity and investor protectivism, it also promotes ease of regulatory compliance. There could definitely be some financial impact. We are still evaluating because it's only been two days, day before yesterday it came, today was a board meeting, but we are internally assessing it. I would just like to leave you with this thought that this is a consultation paper. We should not assume that whatever I've been, ultimately SEBI has always taken feedback from public and basis that taken some decisions.
This is a consultation paper at this point of time. The question is in the present form and manner there can be some financial impact. We have not been able to calculate what is that impact but we believe overall it is not as damaging as been perceived to be. That's point. Question number one, I think question number two, SIF, we already have set in a team in place. I think we have Andrew and team which is working on SIF, so we are, we will be, we are in the process of launching our fund. To your question, how big?
I think we personally believe.
I think this category can be very, very big because there is an inherent demand for this. The reason we are trying to go slow on it is we are trying to build up a stronger foundation before we launch the products. I mean, whether to do it from a risk framework, point of view, and various other things. We are very, very bullish about this category.
Pressure on yields, the equity yield is 54 basis, debt is 25, liquid is 12, and ETF overall is 17 basis. The average yield on overall assets is 36 basis, which remains similar as last month.
Just a follow up on that yield part. Any alterations in commission, something which they have done in this quarter or any changes that we are looking to do going ahead?
Yeah, Pratik , I was just continuing. Yes, we did one scheme in this quarter which covers almost overall four scheme in last two years covering almost 60% of the equity, and we have done on the variable basis. That is a long term strategy. We always done when we do reduction in any changes or rationalization in the commission.
We've done one, you think, in this.
Total four.
Okay.
Okay.
Thank you so much. I wish you all the best.
Thank you.
Thank you. The next question is from the line of Divij Punjabi from Banyan Tree Advisors. Please go ahead.
Yeah, hi. We're seeing high expenses of 9.4% QoQ. Can you just help us understand that increase?
Okay, Divij, the other expenses increase is due to some of the branding exercise which we.
Did in the current quarter, which was.
Not there in the last quarter. Plus there are some investments which we have done on the technology side which is coming and some of the expenses which are there for the new offices which we have taken in our new office which we have taken for that. There are some maintenance charges which have started coming from this quarter. That is what roughly overall reasons for the increase in other expenses.
My second question is around the debt segment. Growth here has started to pick up. Can you just help us understand?
Like which teams are doing well here.
What is the outlook going ahead?
Yeah, so Divij, this is.
If you have been following our commentary for the last three quarters, we have been communicating that fixed income is one category where we wanted to build up our scale and market share. Across the categories, we have started seeing positive inflows coming in, which includes the short term as well as the longer term products. I think that's the reason why our market share has started now inching up. With the view on interest rates from a slightly longer term point of view being positive, we feel that such products will definitely add value to the investors' portfolio. We are doing a lot of engagement with investors and distributors to ensure that these categories start getting meaningful allocation into the investors' portfolio.
Thank you.
Thank you, ladies and gentlemen. Before we take the next question, a reminder to all: anyone who wishes to ask a question may press star and one on the Touchstone telephone. The next question is from the line of Harsh Gupta Madhusudan from Ionic. Please go ahead.
Hi, my question is, is it possible for India to see futures options on ETFs? Is there a regulatory requirement against it, or is it just because the AUM is not large enough?
This is a question I don't think I'll be able to answer as I think there are certain restrictions. At this point of time, we have more vanilla products but you never know. I think one good thing is SEBI is always in a conservative mode.
You may see something like.
That's coming in ETFs also. At this point of time, it is not there. The only good thing what has happened is, I think in SIFs, I think this option will be available.
With respect to ETFs, I mean.
It's a future it will have. It will be inappropriate for me to comment on something which the regulation does not allow to do at this point.
Is there any other form of ETF innovation that you have in pipeline for Nippon or across the industry? Are you noticing anything?
I think I'll give you a little different perspective.
Let me give you a different perspective to the whole thing. While we'll continue innovating and launching products, if you see globally, you look at the top 10 economies, countries in the world where the ETFs are of a significant size, 80%- 90% of the ETFs are in the plain vanilla benchmarks. It is, you know, I mean whether it's so like in our case also in India, whether it is Nifty, Sensex, Bank Nifty, gold. Typically, this is a trend across the world. In some places, it could be 70%, some could be 80%.
We will continue working on innovation.
I think a bigger focus will be to continue to focus on the core products which are there where the investor appetite is higher and to ensure their low tracking error and high liquidity.
Okay, thank you.
Thank you. The next question is from the line of Kushagra Goel from CLSA. Please go ahead.
Hi sir.
Thank you for taking my question regarding.
Your non MF AUM.
I know you talked about.
How subsidiary and AIF study, but if.
You could share more color on how we should look at it growing going forward as well. Secondly, if you could share its.
Yield or the fees which you get on that, how should we think about those moving?
Kushagra, the idea is to grow our non-ML businesses and we have a separate subsidiary, which is the alternative investment fund subsidiary, where we continue to grow our AUM and we continue to keep on doing various launches on private credit, equity, and VC funds. We are selling it in the India market and also in international markets. That is the idea. Plus, growing our offshore subsidiary AUM will also be a focus area for us going forward. Currently, it's a small part of our overall business, but the ambition is to grow bigger. The yields currently on these products are in the range of around, it's very wide depending on the product.
Hello. Yes, please go ahead. Ladies and gentlemen, the management line got disconnected. Please hold on while we get them reconnected.
Yeah.
Yes sir, please go ahead.
Sorry, the call got disconnected.
I think some technical glitch. The reason these products are wide range, some of the product it's in the 60 year basis and some product we earn around 120. The range is very wide.
Thank you.
Thank you, ladies and gentlemen. Anyone who wishes to ask a question may press star and one on the touchstone telephone. The next question is from the line of Meghna Lutra from Incred Equities. Please go ahead.
Yeah, sir, I just had two quick questions. One is a data keeping question. Is the gold ETF the same yield as other ETF book? My second question is I wanted to understand what is the, what proportion of our sourcing, especially on the SIP front, is from fintechs and how do we compete in this segment? For instance, in the MFD segment, there are elements of relationship to the MFD, the performance of the fund, the location, and the commission. What elements play out in the fintech segment?
These are my two questions.
What proportion is of the SIP?
Gold ETF realization is much higher than the average ETF, you know, normally. I think it's much higher. Our average yield for ETFs is 70 basis points. For a gold ETF it's higher. Your question on fintechs, I think that if you were to go back to a lot of calls, every time we say, I mean it is not about when investors invest, it is not always about brokerages or anything. It's ultimately a package of trusting the brand, performance, various things that pull the investors. From the earlier question which was asked to Parag, with expenses going up to which he answered that I think they're investing in building the brand. It is the brand that pulls the investors towards us.
The brand perception, performance, and especially because we are very strong from a risk management point of view, investors who clearly, I mean there are some investors who are always looking for returns, some investors who are more looking at risk adjustments, and I think those are the investors that get attracted to us. There is no other pull factor. There's no other factor. These are a composition of multiple things: brand, emotional connect with the brand, and the pull that gets created because of that.
Okay, sir.
What proportion would be a source of SIP source through fintechs?
SIP fintech is about 25% by value.
Okay.
The gold ETF number, I don't think we'll be disclosing that, right?
No, we will not be discussing that.
Okay, thank you.
Thank you. The next question is from the line of Lalit Deo from Equirus Securities. Please go ahead.
Yeah. Firstly, on this rationalization of equities, going ahead, how should one look at this? Are we planning to do on some of the further schemes, and if you could quantify like how it could have helped in predating the expense or limited the impact on 1 basis point? Second, just a clarification, was a little.
You know, this thing couldn't understand. Oil was cracking. Can you please repeat it?
Yes sir. Just wanted to understand on the rationalization of commissions in one of the schemes. Going ahead, how should one look at this? Are we planning to do rationalization in those schemes? Secondly, one clarification on the ESOP cost. As per the filing, it says that our ESOP cost for the quarter was around INR 6 crore, whereas we have look.
At it, that it would be in.
The range of around INR 46 crore- INR 48 crore. I just wanted to understand, will that cost increase in the next subsequent quarters?
Okay.
Hi.
I'll take the first part with regard to rationalization. Like we have been mentioning, almost 60% of the equity AUM has been covered under the rationalization scheme. That definitely is a long-term strategy which we have built. The good part is we have multiple products which are in the process of building up scale, and hence we will be conscious of the fact how we price our products in the market. As and when the scale and size increase, we will definitely take decisions around those products. As of now, these are the four categories or four schemes where we will continue to maintain the rationalization we have done.
And.
On the ESOP, the INR 6 crore is on the new scheme, and the overall spend for the current quarter is around INR 9 crore.
Okay.
Thank you. The next question is from the line of Pratik Jain from Motilal Oswal, please go ahead.
Thank you for the follow up. Just a couple of questions. Firstly, saying the previous one, previous question, what should be the run rate that we should be taking for the second half and you are going ahead? Second is on the offshore business. If I look at the AUM, it's been kind of, you know, actually on a decline, slightly declining trajectory from about INR 172 billion in September 2024 to about INR 161 billion in September 2025. On the managed side right now, why is this kind of stagnant or a slight decline and how do you think we can grow this piece of the business?
On the fresh ESOP, the total expected spend for the year is in the range of around INR 40 crore-INR 43 crore. Currently, we have around INR 18 crore or 18 crore, 19 crore of it for the first two quarters.
Next year.
Next year will be in the range of around, if the current plan continues, it will be around INR 26 crore.
Got that. Got that. On the question offshore.
Decline in.
As you know, given the overall geopolitical situation internationally, that is why the offshore is slightly.
Not grown.
The decline is mainly due to the MTM which has happened because offshore is a lot driven by the equity flows in India. The MTM impact also had on the AUM which has resulted in lower AUM.
I think only thing I like to.
I think while definitely it's a little AUM is lower, but there is a lot of initiatives and activities happening, and you will see in the coming few years the AUM from offshore will keep increasing.
Question from on the we have kind of altered the commission. How should we think about the ease going ahead on the equity side you have still maintain the one to two basis every year on the overall basis.
Yes.
The historical data shows that we think that with the growth in the AUM and with the telescopic pricing, we think our at least view remains is in the range of around 2 basis every year.
Thank you so much.
Thank you. The next question is from the line of [audio distortion] . Please go ahead.
Yeah, thanks for the opportunity. My first question, actually I was looking at your distributed assets pie chart and I see the retail share, you know, jump sequentially from 50% to 54%, whereas, you know, corporate fell from 14% to 11%.
One.
How should one read into this, and do you think that retail gain is kind of sustainable?
Yeah.
Hi.
I think it's an important question because, like you have been observing our commentary and what we have been communicating, we have a very strong retail franchise through the mutual fund distributors as well as our SIP book is increasing. The growth of the SIP book, the growth of equity assets, and the deepening of the investor base. What we have done by going deep into India is resulting in more retail money coming to us, which probably is something we will keep building on because these are sticky long-term assets. What we are gaining, we also did mention to you that we are trying to build our fixed income business through the distribution channel. That's also helping us to get a lot of retail money now into mutual funds. The pie shift has happened.
It may not increase substantially from here on, but the overall growth in the distribution, distribution pie, distribution business will definitely happen as we go ahead.
Understood, that is helpful. Secondly, in terms of the branch expansion, I think you opened five branches in Q2. What is your strategy going forward, and what was the impact on your operating expenses on the same?
I don't think so, I mean.
The impact on the new branches will be very high. I think what we are doing is basically a lot to.
Break it down in two parts.
I think some of the old existing branches which were there, we go to refurbishing bigger branches, and I think more than the format of banking kind of a thing.
I mean where it's more, you know.
I mean a customer-friendly kind of a thing. That is one, and the other branches.
Which we plan to open in very.
Small cities and towns, we are talking of 200, 300 city location above. I mean out there the cost is not very high.
I don't think so from a.
a cost point of view, the branches will be high.
The only cost that you have seen in this financial is going to.
The new office that we have acquired, that's going to be a one-time thing. Our branch cost will not be very high.
Okay, what is the strategy as in you would open such branches in the next 18- 24 months as well.
We would like to refurnish a.
Lot of our branches which were more.
Basically, in the old format.
When the smaller branches and all, I think we are trying to be more visible. I think bigger branches, more of the bank kind of branches. If you want to see branches in Jaipur, Surat, Bhubaneswar, they're very unconventional. Branch mutual fund branches are more similar to bank branches. That's the concept that we're working on.
Understood, that is helpful. My last question is in terms of the market share in ETF business, I think it's very healthy. We have kind of expanded as well. If I look over the last 12 - 14 quarters, but if I look sequentially it was kind of flattish, you know. Basically, my question is that do you think that owing to competition we have peaked at around 20% market share or do you think this could go for further expansion?
Again it's.
I don't think it's a question of competition. I mean if you were to again look at it globally, ETF business, the.
Top two or three players typically take.
80% - 90% market share on their liquidity.
I think what.
You have seen the future because I.
Think we had a little bit of.
EPFO money, I mean in EPFO which was in CPSE ETF, you know, long back I think and they have gone as per the public information available they are booking some profit. Overall, I think I take it the other way around. I think during Diwali period if you look at gold ETF, I think we were 53% volume of the stock exchange and this continues to grow.
At the healthy 20% even if.
we were to maintain the same number and the market grows, I think it's a very big positive for us.
Understood, that is very helpful. Congratulations, Sundeep sir, for the appointment as MDMC. That's it from me.
Thank you.
Thank you very much.
Thank you. As there are no further questions from the participant, I now hand the conference over to the management for closing comments.
Thank you all for joining this call. If you have any question, you can connect with our investor Harish and we are happy to answer questions. Thank you.
Thank you, sir. On behalf of Nippon Life India Asset Management Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.