On Wednesday, HDFC AMC stock price plunged over 9% after market regulator Sebi capped expense ratio for mutual funds while Nippon stocks fell over 10%. The stocks of HDFC AMC fail up to 9.28% or 143 points in trade today. Yesterday, the stock closed at 1540.20 level yesterday. Today, the stock opened at a loss of 3.91%. It opened at 1,480 level today and hit an intraday high of 1,498 before touching a 52-week low of 1,397 on the BSE.
The stock listed at Rs 1,738 per share, a premium of 58% over the issue price of Rs 1,100 per share on the NSE. In the last month, the stock has lost over 17%. Meanwhile, on the level of BSE the Reliance Nippon Asset Management stock fell up to 10.29% at 192.10. The stock which closed at 214 level in yesterday’s trade opened at 206 level and fell to a 52-week low of 192.10 on the BSE.
At the starting of year, the mid-cap stock has fallen over 35 %. During the period it is falling for the last 3 days and fallen to 13.62 %. The stock opened at a loss of 3.81% in trade today.
Motilal Oswal, another key player in the mutual fund sector, also took a hit in the market. Its stock fell up to 2.66% to 752.80 level on the BSE. The mid-cap stock is trading 2.71% away from its 52-week low of Rs 735.30. It has been losing for the last two days and has fallen 3.46% during the same period.
with the beginning of this year, it has fallen 49.28% and lost 40.79% during the last one year.
On Tuesday, the board of market regulator Sebi cleared the proposal to cap the maximum total expense ratio (TER)-the fee that mutual funds collected from investors every year to manage their money-for closed-ended equity schemes to 1.25 % and other than equity schemes to 1%.
The maximum TER for open-ended equity schemes has been capped at 2.25 %.
TER is a percentage of a scheme’s corpus that a mutual fund house charges towards expenses, including administrative and management.
The expense ratio has been capped according to the assets under management (AUMs) of the mutual funds. For schemes with AUMs up to Rs 500 crores, 2.25% will be charged as expense ratio every year. For the next Rs 500-750 crore, it will be 2 %. Between Rs 750 crores and Rs 2,000 crores, the fee will be 1.75 %. For Rs 2,000-5,000 crores, it will be 1.6 % and large equity mutual funds with assets above Rs 50,000 crores will be able to charge just 1.05%.
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