Aditya Birla Sun Life Amc Ltd (NSE: ABSLAMC) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
A. Balasubramanian — Managing Director and Chief Executive Officer
Prakash Bhogale — Head – Business Planning, Analytics and Investor Relations
Analysts:
Jignesh Shial — Analyst
Dipanjan Ghosh — Analyst
Prayesh Jain — Analyst
Abhijeet Sakhare — Analyst
Lalit Deo — Analyst
Mohit Mangal — Analyst
Bhavin Pande — Analyst
Madhukar Ladha — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Aditya Birla Sun Life Asset Management Q3 and FY ’25 Earnings Conference Call, hosted by InCred Equities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask question after the presentation concludes. [Operator Instructions]
I now hand the conference over to Mr. Jignesh Shial from InCred Equities. Thank you, and over to you, sir.
Jignesh Shial — Analyst
Yeah. Thank you, Anoop, and good evening, everyone. On behalf of InCred Equities, I welcome all to this Aditya Birla Sun Life Asset Management Earnings Conference Call 3Q for FY ’24 Earnings Conference Call. We have along with us Mr. A. Balasubramanian, Managing Director and CEO, along with the senior management team of Adity Birla Sun Life AMC. We are thankful to the management for allowing us this opportunity.
I would now like to hand it over to Mr. A. Balasubramanian, Managing Director and CEO of Adity Birla Sun Life AMC for his opening remarks. Over to you, sir.
A. Balasubramanian — Managing Director and Chief Executive Officer
Yeah. Thanks. Thanks, Jignesh. Good evening, everyone, and thank you for joining today’s investor call. I hope you all had the opportunity to see the earnings presentation, which has been put out in the exchange as well as our website. Let me begin with the economic outlook very quickly and give an update on MF Industry as well. The current global macroeconomic landscape presents a mixed picture of challenges and with some bit of cautions to have come with optimism. Global growth is expected to remain stable with the most forecast placing it around 3.5% to 3% to 3.2%. Banks are now likely to maintain a cautious and monetary policies and their gradual normalization of interest rates after a period of tightening and global markets have experienced increased volatility leading up to the new administration of US taking power. We expect this volatility to subside in Q1 FY 2025. Once there is a greater clarity on the policies of the new administration.
Against this backdrop, India is expected to maintain its position as one of the faster-growing major economies with GDP growth of 2025 estimated about 6.5% and India’s economic outlook remains though is a positive, supported by strong fundamentals and favorable government policies. We might also participate in the recent volatility we have witnessed in the global market. Inflation is also showing signs of moderation with the RB actively managing it through effective monetary policy measures. We expect balanced recovery with a moderate uptick in both private investments and consumption.
The Indian equity market is currently witnessing significant volatility, driven by a mix of global and domestic factors, rising inflations and potential trade-related issues and global market turbulence due to geopolitical tensions and economic uncertainties are fueling price fluctuations and despite global uncertainties and domestic challenges, Indian economic resilience and policy reforms and growing retail participation should continue to fuel investors’ confidence in the market.
Coming to the mutual fund industry, the industry has witnessed record-breaking growth of 24, reaching all-time AUM high of INR68 lakh crores. As of December 2024, the mutual industry quarterly average AUM reached INR68 lakh crores as compared to INR49 lakh crores as of December 2023, growing about 39% on a year-on-year. During Q3 FY ’25, the mutual industry witnessed the equal net sales around INR1,50,000 crores through new fund offerings and also inflows in the existing funds.
The total NFO collections in equity funds were around crores, majorly coming from sectoral and thematic funds the industry SAP continued to show good growth with a 50% year-on-year growth around INR26 on INR500 crores in December ’24 with 5.26 crores unique customer-base. The total number of mutual portfolios stood at INR22.8 crores with a year-on-year increase of 37%. The individual average AUM grew by 39% year-on-year from INR30.7 lakh crore to INR42.5 lakh crores and contributed 16% of the total assets under management. And this was on the back of institutional AUM have remained somewhat flat for last two years for a variety of reasons, including the withdrawal of tax which you saw last year. And B30 cities with an average AUM of INR12.83 lakh crores accounted for 19% of the total AUM. At IT+ and ANC, our overall average assets under management, including alternate assets stood at INR4 lakh crore-plus, reflecting 23% year-on-year growth. Our mutual fund average AUM reached INR384 crores growing by 23% again year-on-year.
The quarterly equity average assets under management stood at INR1,79,000 crores, growing about 32% year-on-year. The uptick in equity investment performance-driven by improved perceptions and strong narratives has helped — has gained traction in equity net sales during the current quarter. Our SAP book grew by 38% year-on-year from INR1,05 crores INR55 crores in the years December 2023 to INR1,382 crores in December 2024. We also added close to about 6,70,000 new SAPs, which again increased or by 3 times compared to the previous year-around same time.
The total investors folio crossed INR1 crore, now it’s about INR1 crore, INR5 lakh is the investors folio with around 24 lakh new folios added during the nine-month period of FY 2025. And during the quarter, we launched the ABSL conglomerate fund, which is a unique fund with a different concept and garnered about INR1,373 crores. We also conceptualized and launched the industry-first three to six months index one, which also gone out close to about INR714 crores during the current quarter.
The retail sales teams, which is dedicated to drive the higher engagement and establishing strong mindshare in the deeper market through series of impactful initiatives. We have been running programs like, which is nothing but and Groom Oman MFDs, fostering inclusivity and leadership within the sectors and providing an returning program in order to gain higher engagement and higher mind share and higher market shares. And Fulcrum, which is to focus on equipping with the tools and strategies to build high-performing teams driving sustainable business growth and improve overall productivity of the team as well as the distribution partners.
Third is a legacy LEAP, which is designed to cultivate the next-generation of MFDs by sharpening and enhancing their skills. So these initiatives, we believe will help us create a long-lasting impact across retail channel improvement that we are trying to bring on the overall basis. On the alternate business front to meet the growing needs of HNIs and family offices, we continue to strengthen our team and enhance our PMS and AAF offerings both in equity and fixed-income. In fact, our PMS assets, including AAF equity — long-only equity grew by 44% year-on-year from INR2,671 crores to INR3,853 crores. We are seeing momentum picking-up as far as our PMS and AIF traction concerns. On offshore business, we grew by about 28% from INR9,894 crores to about INR1,686 crores.
In fact, in the current quarter, we have seen some inflows coming from offshore investors into India dedicated funds that you have created both in Europe and platform as well as on the city to get money into the country. And in-line with our vision to scale the passive business, we continue to offer a diverse product portfolios to our investors delivering strong returns. As of December 2024, our total passive assets stood approximately about INR3,1600 crores and our customer-base has grown to over 10.69 lakh folios. Our diverse product offerings currently — currently about 52 and we plan to launch additional funds in the coming quarters to further expand and our passive investment options.
Moving on to the financials. Our quarterly revenue from operation was at INR443 crores versus INR340 crores in Q3 FY ’24, up 30% year-on-year. Our quarterly operating profit also has shown a significant improvement in the grow in the current quarter to INR262 crores from INR184 crores in Q3 FY ’24, up by 42%. In fact, our operating profit grew by 42%, which is higher than the overall revenue operations, about 30% growth then. On the nine-month period, our revenue from operations was about INR1,256 crores versus INR988 crores for Nine-Month FY ’24, up by 27% year-on-year. For the same nine months period, our operating profit was about INR710 crores versus INR528 crores again for Nine-Month FY ’24, up by 35% year-on-year.
With this, I’d like to conclude and open the floor for any questions that you may have.
Questions and Answers:
Operator
Thank you very much everyone. We will now begin the question-and-answer session. [Operator Instructions] We have our first question from the line of Dipanjan Ghosh from Citigroup. Please go ahead.
Dipanjan Ghosh
Hi, good evening, sir. First, maybe I’ll just start-off with a few datakeeping questions and then I’ll move on to my generic questions. So if you can quantify the employee number, SIP flow for the quarter, ESOP expense and non-mutual fund revenues.
A. Balasubramanian
Yeah, I will ask Prakash to…
Prakash Bhogale
So employee count as of December ’24 is INR627 crores. The SIP flows for the quarter is around INR4,000 crores. What was the other question?
Dipanjan Ghosh
Non-MF revenue and the ESOP expense?
Prakash Bhogale
Yes. The ESOP expense for the quarter is around INR28 lakh and the non-MF revenue is in the range of around INR34 crore INR35 crores.
Dipanjan Ghosh
Okay. Got it. So sir, just moving on to the question front. First, starting off from this employee number only, it seems that sequentially there has been a significant uptick in your employee base from around mid 1,500 to 1,627. So just wanted to get some sense of is — has the entire employee cost been absorbed in the base or should one see it kind of overflowing into the next quarter? And also in this line, given the way the markets have been going into, let’s say, the next year, if you were to remain choppy, do you expect the overall opex trajectory, how do you expect that to really shape up?
The second question is on the mutual fund or rather the overall yield part. If I understand correctly, there has been a significant sequential improvement in yields. So can you just explain that? And lastly, just qualitatively for January, how are you witnessing your net sales redemptions and maybe for the industry, if you can give some color out there?
A. Balasubramanian
Yeah. So as far as the employees are concerned, but of course one wherever we are building up our team especially in the passive direct as well as emerging markets where we are opening a location and especially place like Mumbai where we are further strengthening our team for their distribution front-facing sales team. So largely the increase is on account of them. There will not be any significant addition of the top-level, all at the operating level. That I think more or less this year, whatever we have taken as a budget, thought before we start the year, next year, we’ll complete the recruitment this year. So the next year, we don’t need to increase the headcount on overall basis. That’s broadly the principle in which we function. That’s something I would say this increased headcount on account of that.
As far as the — as far as the in the month of January is concerned, I think broadly the trend remains the same. We are not seen any significant change, the trend that you have witnessed in the previous quarter. I think we are seeing a net sales improvement for us is coming in gradually in some of the schemes you already identified as a scheme to be pushed from a broader perspective where we are seeing some kind of improvement and SAP focus continues to remain. So again, no major change. But however, the current volatility will not just watch out. There is one trend will have to just watch out. In general, what happens when the market turns volatile, the lump-sum generally normally comes, they don’t come as aggressive as it generally is supposed to be.
Second, SAP is while top-line SAPs continue to come, normally the cancellation rate from 50% 58% average that goes to say 65% and comes back. But right now going by the January trend very difficult to make many assessment, any significant deviation that we are witnessing currently.
Dipanjan Ghosh
And sir, on the mutual fund yield part, what happened during the quarter?
Prakash Bhogale
Yeah. So on the mutual fund yield, the improvement which you are seeing is mainly account of two, three reasons. One is on few debt scheme, we have increased at TR that has resulted in the increase in the yield. The other one is the mark-to-market because of the lower AUM, are we able to charge some higher TR and there some yield has been improved. And the third reason is on account of marketing and distribution expenses has been religned — realigned based on the current market conditions. So these are the two, three reasons because of which you can see the improvement in the yield.
Dipanjan Ghosh
So sir, I couldn’t understand the last part, what you mentioned in terms of marketing and distribution getting realigned. So is it like the increment — yield comes incremental?
A. Balasubramanian
Complete the question.
Dipanjan Ghosh
Sir, is it on the incremental flows where the commissions are getting realigned? Or is it like your overall distribution expense that you are spending for the franchisee is getting reduced or is it on the back-book that you have taken some kind of repricing even if you can just give some color?
Prakash Bhogale
So based on the current situation, we have projected few marketing and distribution expenses for the year. Okay. So those expenses has been realigned, which has resulted in the increase in the fees.
Dipanjan Ghosh
Sure. And on the debt book, you have kind of repriced on a few schemes if I missed that part.
Prakash Bhogale
Sorry, the few debt schemes we have, we have increased the TR. That has again resulted in the increase in revenue.
Dipanjan Ghosh
Got it. Got it. Sure. Thank you, sir, and all the best.
Operator
Thank you. [Operator Instructions] We have our next question from the line of Prayesh Jain from Motilal Oswal Financial Services. Please go ahead.
Prayesh Jain
Hi, good afternoon, sir. And decent set of numbers. Just thoughts on how aggressive or how — what kind of growth aspirations you have on the non-MF businesses, probably if you could give us some three to five-year aspirations or targets for AUM size of PMS, AIF or Gift City, any of these things which can be significant contributors to your revenue and top-line your AUM and top-line, that would be much healthier.
A. Balasubramanian
Yeah. Thanks. As far as alternative business is concerned, last three years investment that been making both in-building DMS AIF and AAF, fixed-income credit and real-estate fixed-income credit and offshore. And lastly is the passive. This is a five different verticals we covered under the alternate. Given the fact that it can easily fit into our family offices and HMIs across different parts of the country. Right now this PMS and put together we have roughly about 40 crores kind of size. And definitely the overall scheme of thinking that we put aside this year for next five years a roadmap, we have been assuming the rate of growth in the business has to be faster than the mutual fund and given the fact that the customer segmentation here is different from mutual fund and that we are seeing already both in terms of the AUM growth as well as on the profitability contributions.
Though I cannot give any specific number per se, but otherwise, we have put as a carry for individuals across the country from a sales team point-of-view, 20% of the carry is goes towards building our BMS business. AF for credit fund, we already committed some seed capital from AMC business and a basis which few commitments already started coming in, some underwriting of instruments have started happening and initially our idea was to collect close to about INR750,000 crores kind of size. I think upon building the first issue and then closure up the first issue, then we start building up the second launch. So that’s something which we have put in-place. And highly speaking, in the PMS and the AF equity side, we would be running close to about INR20 crores kind of size over a period of time. In the case of AAF credit fund would be running for close to about INR500 crores kind of size for a period of next three years and in the case of the case of real-estate fund where we have already given good experience wherein we manage roughly about INR750 crores of money that we are already managing it. Whatever efforts we have put in terms of reaching out to global investors, we are seeing some traction in that. There also will be looking at the first bigger closure, the next one and a half years close to about INR500 crores size and keep building it as we start making a progress on the number which I’m just mentioning. Clearly, the idea is to build this space in our overall basis.
Offshore, in fact, I’m seeing some traction. In fact, the last quarter we saw some success coming from two of the Canadian-based investors with whom we have a tie-up for the India dedicated mandate, we saw some flows coming in. Whom we also have tied-up from India to invest in overseas market. We have seen some success, which also now starts giving revenue through the gift city. We will see volume picking-up in this space and subject of course, emerging market attraction for investors point of vie continues to remind. As far as the passive is concerned, right now we are roughly about INR30,000 crores INR30,000 crores kind of size clearly we are keeping an eye that how do we make your passive business verticals, which includes index ETF, fixed-income target maturity fund to reach a size of about INR1 lakh crore size over a period of next three years, that’s something as part of the business plan and work towards that.
Prayesh Jain
Got it. That’s quite interesting. But one aspect which I wanted to understand also was what are the kind of costs that we are incurring today on a run-rate basis on — in the non-MF businesses, which the reason why I’m asking that is, you know, as these businesses scale-up, the profitability improvement can be significant because if your teams are in-place and no further hirings or no major hirings would be needed, then the revenue grow — with AUM growth coming in and then following-up with revenue growth, the profitability of the entire company can improve significantly. So just if you can give some color on the — what is the cost of non-MF businesses or at what level they are operating today?
A. Balasubramanian
Yeah, one second…
Prakash Bhogale
So, Prayesh, difficult to give you the call because we have not disclosed the cost as such for the particular business as such. But as we have already spoken that the alternate asset business used to contribute around 14% 15% of our total revenue. So currently, it is in the range of around 7% to 8%. So our target is to take it further to around what we were there in the earlier period.
A. Balasubramanian
But I’ll just to add to that. See, the cost has more or less remains busy. Whatever team we have to add, we already done that except will only do the replacement of people who left. So it means incremental cost as far as people concerned, main is investment function and that we are already full. So that’s unlikely. There is one cost which anyway mentioned on the last call also I mentioned that we’ll add somebody to hit the overall alternative business to drive this separate vertical which is a senior recruitment will do would take the entire responsibility of the building offshore business. That cost will get added.
But beyond that, what we are trying to leverage is the distribution sync which has been created. That’s why it comes in the form of KRA of people to add to the overall growth, which essentially means existing people, the sales will only add to the success of the alternate business, which will come as an add-on business rather than adding — coming along with the incremental cost even this quarter, the last two quarters itself, we have seen the addition of our revenue contribution coming from the alternate business grew by almost about — improved by almost about INR16 crores INR17 crores. Additional revenue came because of the increase in assets in altern business.
Prayesh Jain
Yeah. Everything is profitable today. Only the question is scale. Got that. And sir, the last question is on the on the mutual fund business here, where you know if you — so one performance is one element where we are seeing some green shoots for you. The other element to grow the AUM is the distribution machinery, right? And at the time of IPO, we have — we were talking about a lot of growth coming in from cross-sell to the group companies. Apart from that, any other drivers that you are putting in the business model to kind of really take-up this momentum further stronger because we are just at the cusp of fund performance improvement and if the distribution machinery also kind of picks up more momentum, then you have a great run-rate correct.
A. Balasubramanian
Now with respect to the distribution, of course, we have an established distribution model as far as the retail concerned. So that which is basically divided into RT30 and B30 and then beyond that the emerging market. And then within that, we create a five-step of vertical that we created. One is VRM model to activate IFAs, growing IFAs in the country. We are seeing good success we keep adding more people to the VRM model by the virtual RM model that we keep increasing number of team members. I think as each time period they passes, they also learn from the experience and then keep improving on contributing overall success. We are seeing some success.
In fact, I must mentioned, the conglomerate fund that we had, in fact, close to about INR70 crore INR80 crores got added from the VRM channel itself in addition to the traditional distribution channel. So that’s something we are seeing as a success. Second is operation team beyond the point when it becomes well-oiled engine, the operation team, which is service facing team can also contribute the overall success of the sales. We got a service to sales, we are stepping up the focus. And each year we keep increasing the target to ensure their contribution increases. While these are the established model that we have, emerging market is one where as a fund as always had great success coming from creating our presence in smaller locations and improve our presence in those markets, therefore, increase our market-share. The countries remain one of a big area. For currently, we have about 95 locations which you operate at while 95 may remain 95, but some will go to the branch level, some new branch locations will get added there. That’s something remains another big area of focus there.
Having built that, I think last one year, given the fact that we need to step-up our engagement on distribution activities and also get a higher output, the team got together, identified about 25 locations in the country, which gives roughly about 80% of the overall sales volume for the industry, including ourselves. And what are the steps that we can take to ensure these 80% market gives me higher contribution by way of engaging at this ground level. That’s something we are doing. In fact, one of the initiatives that we are taking this year is we normally do an annual OIH event. This year we are converting that into a YAG one. We are continuing, but we are doing only with the cream of people with whom our market-share is less. But subject to our high engagement and they’re getting convened as you rightly mentioned about the perception and performance improvement is coming, also being noticed. Therefore, we can get incremental AUM from them. That’s something which we are now doing it. Upon doing this, we’ll probably do this across different parts of the country to ensure the distribution engagement increases quite significantly as they are currently putting an effort.
Prayesh Jain
Got that sir. Just last bookkeeping. Can we get the yields on each of the asset classes for this quarter?
A. Balasubramanian
Sure.
Prakash Bhogale
So, Prayesh, the yield for this quarter on the equity side is in the range of around 70, 71. Our debt is 25, liquid is 13 and ETF is around 7 basis-points 8 basis-point.
Prayesh Jain
Thank you so much. All the best.
Operator
Thank you. [Operator Instructions] The next question is from the line of Abhijeet Sakhare from Kotak Securities. Please go ahead.
Abhijeet Sakhare
Hi, good evening. Thank you.
Operator
Sorry to interrupt Mr. Abhijeet, but can you please be a little louder?
Abhijeet Sakhare
Yes. This question on yields again. But if you could quantify what was the increase in the debt that we have filed in the previous quarter?
Prakash Bhogale
I don’t have that data, Abhijeet, but I don’t have that data to quantify the yield increase on account of debt side, but on few of our debt schemes, we have increased the TR, which has resulted in the in the increase in the yield.
Abhijeet Sakhare
Okay. And overall number?
Prakash Bhogale
Overall it’s around 100 basis point.
Abhijeet Sakhare
Yeah. Yeah. Got it. Got it. And then going-forward, are you anticipating any further tweaks to the overall TR number of in the 4th-quarter or going ahead, both on the equity or…
A. Balasubramanian
Equity will remain more or less the same. I don’t think — sometimes you must also remember, this number keep changing depending upon which bucket in which AEM moves. But otherwise, broadly equity should remain the same. As far as the season come concerns, one can expect marginal improvement on the yield given the fact that as interest rates get stabilized and then start coming down gives some kind of room for growth in the duration assets wherein the expense are generally higher than the liquid fund or liquid plus funds. So to the extent one can expect that segment to improve.
And third is we’re also pushing very aggressively our hybrid funds where like allocation fund, balance advantage fund, equity savings fund, we are giving a push in terms of sales. And as we start seeing the overall improvement in terms of sales activities there, once again, the revenue contribution coming from that segment also right. Given the fact, again, the size is relatively lower compared to the large industry size, therefore to the extent we could see the improvement in the revision.
Abhijeet Sakhare
Got it. So again, coming back to the, now that we’ve seen some improvement in performance, especially in the shorter-term bucket, have you seen any improvement as far as the other products getting included in overall recommendation list or any material change in how the products are perceived in the major channels.
A. Balasubramanian
Yeah. See, we — that’s anyway that keeps coming on and off. I think the major channels in the organized channel except one or two, we have been part of the recommendation in most places. In fact, I must mentioned that our large car fund front and equity and funds, both of them are now coming as part of the recommendation list in the organized channels. We are seeing progress in the current quarter, even our balanced or, which has again have been improving on the overall performance, we are seeing money coming — getting recommended in the — in the organized channel.
Third is the multi-asset allocation fund which of course about one and a half years of track-record done exceedingly well, also being included as part of the recommendation list by the organized channel piece. As the online channel concerns, we did have huge success in the last quarter a few of our funds came as part of the recommendations and those recommendations keep moving up-and-down depending upon — depending upon the ranking which they calculate from an overall basis. But we have our funds are part of our — the core list, which is basically Equity, FlexiCap and multi-cap, multi-asset allocation fund and balance of knowledge fund. These are some of the funds that have been part of the recommendation system. We are seeing some kind of progress in this space. But of course, in order to this to get converted into a visibly higher — higher AUM contribution coming from this segment that we continue to work towards it, the number keeps improving on a quarter-on-quarter basis.
Abhijeet Sakhare
Got it. Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Lalit Deo from Equirus Securities. Please go ahead.
Lalit Deo
Hi, sir. Good evening. Sir, just wanted to confirm firstly on the debt side, could you classify the overall yield on the debt side? Was it 23 basis-points?
A. Balasubramanian
25 basis points.
Lalit Deo
Sure, sir. And also could you — one more data keeping question was, could you quantify the SIP AUM for the — as of December end, sir?
Prakash Bhogale
Yeah. It is INR78,000 crores. Lalit.
Lalit Deo
Sure, sir. So just on the SAP flows, so like what we have been seeing is that for the industry, there has been an uptick in the monthly SIT flows, whereas on our — whereas for us, there has been a decline and the discontinuation rates have also increased. So what could you give us some reasons like why — what would be the major reasons for the sales?
A. Balasubramanian
And broadly on SAP the trend remains in terms of in terms of registration numbers except we saw especially the lump-sum ticket SAPs. As you mentioned about normally during marker volatile period, lump-sum is the one which generally gets stopped and then they can come back, which I call it as a high-ticket SAPs. We saw some reduction in that. Therefore, we saw overall numbers marginally lower than the previous quarters. Otherwise, the retail SAP that we try to drive, both the way of adding new customers and the new registration coming from the larger channel partners that focus remains there.
But otherwise also from a cancellation point-of-view, generally the ratio is about 50% 45%, especially month of December, we saw the number going up to almost about 55 to 60. And at times when that number suddenly improves rather goes up, it does have an impact on the overall number. But otherwise that I would attribute this to the market volatility that we are currently witnessing, which normally I’ve seen historically that happens for the industry even for us. The number can vary from fund out to fund out. But otherwise thing once things settle down, we should see this number coming back to normalcy.
So generally we try to position as agnostic to the market and that acceptance generally is high. Therefore, we go back to the basics and keep pushing it that safety is something to the market and fluctuations and sentiment. That’s something keep harping on it should only help in terms of maintaining it and improve.
Lalit Deo
Sir, based on this question, sir, like so on the net sales, when we are saying that we are seeing some improvement in the net sales. So particularly in which channel, probably?
A. Balasubramanian
We are seeing more improvement or seeing some improvement in our market-share probably. I think it’s generally spread across all channels, Ralit, mainly the IFA’s contribution on incremental basis improving ND channel, which is the second-largest channel for us. So their contribution is improving. In fact, when we did that fund, we did have participations into our funds coming from almost about 22,000 IFAs contributing to the conglomerate fund, which has also helped us in activating a lot of the IFAs during this period there. We’re also seeing online channels selectively contributing on the SAPs. I think broadly in the order of MMDs and NDs and direct and banking and then online channels.
Lalit Deo
And sir, just last question, any products in pipeline on the active equity side.
A. Balasubramanian
Of course, we already taken approval at the month of launch the fund, which is the innovation fund we have taken approval. We gave a preference to fund over Innovation Fund. And as and on we feel is right either in the current quarter or in the subsequent quarter next year, we will have this product launched. Otherwise, we have a series of product pipeline on the — on the passive side, both on passive equity, ETF and index on equity funds as well as a target mature on fixed-income, both we already have pipeline of product. We have one pipeline of product for Gift City and upon we closing the fund which we launched special opportunity fund recreated.
Now we have created another fund to invest in global blue chips. That’s something we have launched — we already launched and we’ll be aggressive in terms of promotion as the — as you know from the current quarter. We also of course, announced the launch from a Gift City to India that also will do an official launch maybe in the next few months, we will do. These are some of the product pipeline that we have as far as the offshore concerned. Domestic concerned, there’s only one-product pipeline that we have kept as if as it stands today.
Lalit Deo
Sure, sir. Thank you, sir.
Operator
Thank you. We have our next question from the line of Mohit Mangal from Centrum Broking. Please go ahead.
Mohit Mangal
Yeah, hi. Thanks for the opportunity. Am I audible?
A. Balasubramanian
Yes, please.
Mohit Mangal
Yeah. Sir, first is in terms of slip AUM, I think you said that it’s around INR78,000 odd crores. So if I look sequentially, I think there is a 7% decline. Is this number right?
Prakash Bhogale
Yeah, yeah. Because of the equity mark-to-market.
Mohit Mangal
Okay. Understood. Yeah, yeah. Understood. Understood. And secondly, basically in terms of the industry, so there’s a lot of talks of this INR250 you know that is there. So if could — could just help us understand the dynamics of it and how do you intend to kind of use this situation to further improve your SIP thing.
A. Balasubramanian
Yeah. Of course, is there one of the fund also take lead-in this space as the regulator announced sometime back. So we have put things in-place, but even otherwise as well, we do offer 100 SAP for people who can’t afford more than that to the online platform. So we already have that in-place there. And once if it become industry-wide push, well, we would participate in that. But otherwise, in general, SAP is something my one belief is whether it is INR250 rupees or INR100 thing SAP in general having gained the acceptance and momentum and the ticket size — average ticket size also keeps improving. I think our focus would be use this product more to get new customer acquisition rather than rather than focusing on ticket size. I think we’ll have both the strategies go simultaneously. All the INR100 per customer acquisition and then increase the average ticket size of their contribution as they come on-board. So that’s the way we — I see it normally. But otherwise, I don’t think this will have something unique for want to benefit at this time given the fact that SAP itself now is becoming the widest accepted instruments in the country.
Mohit Mangal
All right. All right. Understood, sir. Sir, lastly, in terms of you know, I mean, your peers are kind of rationalizing the distributor commission. And I think basically, any thoughts that you would be doing the same or what are your strategy on that?
A. Balasubramanian
Of course, we do have a curve, no doubt, but however, we need the right balance between the growing the business on one-side — other side grow the distribution channel on the other side and ensure we also be able to maintain a well overall leadership in the industry. Therefore, without just see when to do and how to do and kind of things. But otherwise, we do have scope, but not in the current juncture that we would rather focus on growing the book size and the customer-base and expand the business.
Mohit Mangal
Okay, understood. Understood. Thanks and wish you all the best.
Operator
Thank you. We have our next question from the line of Bhavin Pande from Athena Investments. Please go ahead.
Bhavin Pande
Hi, good evening. Am I audible?
A. Balasubramanian
Yes, audible. Yeah.
Bhavin Pande
Congratulations on good set of numbers. Sir, I just wanted to understand one thing on how do we look at managing fund performance in a down-cycle, specifically thinking from a scenario of us just being on a cusp of turnaround and maybe garnering more flows. So how do we look at it?
A. Balasubramanian
It’s interesting about in I think we also be managing money business I think these are these down-cycle comes and the only way we can manage the risk, which is what we keep harping all-the-time, the drawdown, especially in-market volatility happens, the number of stocks that pull you down should be the leased and number of talks that you in the portfolio that gives you some bit of either index performance or a little better than index performance, the component should be high. So that is the principle on which we normally work sometimes — most of the time you get it dry, sometimes you don’t get it dry, but this time I must mention the last two, three weeks of volatility, most of our funds I could actually withstand these current market volatility and doing better than the market competition. But the only way we manage the risk.
Second, of course, the sizing between large-cap and mid-cap and small-cap. In fact, as a fund house, we have a reasonably good domination in the large-cap and mid-cal space, less our small space. To the extent to the extent drawdown could also be less. I think that’s the only way we keep a close track, which is the investment team keeping a very close track on that in terms of portfolio management operating value.
Bhavin Pande
Okay, that’s helpful, sir. And sir, when we look at the behavior of an IFA partner, let’s say, maybe he is not seeing the discontinuation of SIP right away, but customer is reducing the size of SIP he or she is doing. So when it comes to packing all the things that performance comes into account in terms of allocation?
A. Balasubramanian
Yeah, definitely of course people do pay attention. I think the two-ways I look at it. One is of course improvement in performance. Second is the perception of improvement on performance and third is the respective whatever it is how well we are committed to engage with partners and continue to provide the top-of-mind service. In my talk I mentioned about three, four initiatives that we have taken such as SSV and legacy kind of things. These are all shows our commitment to the distributors. And third, of course, is the customer engagement, direct customer engagement by way of building, giving insight and giving our narrative on a, not about getting a call right or wrong, it’s about being in the front foot and engage with the marketplace. All those things do matter.
And of course, one performance is one part of it. If one performance is there, it becomes much more easier for the front phase team actually to go and patent that much aggressively. If the front performance is actually is there, but in the bottom-line case then you must also replace that at least high-level of engagement ground level. This is a combination which we work. And as it stands today, I would definitely say performance improvement vis-a-vis the peer group, not only there has been improvement, it’s also being recognized and noticed by people. People therefore leading to gradual of that into numbers.
Bhavin Pande
That’s really helpful sir and wishing you all the best.
Operator
Thank you. We have our next question from the line of Madhukar Ladha from Nuvama Wealth Management. Please go ahead.
Madhukar Ladha
Good evening, sir. Congratulations for a good set of numbers and thank you for taking my questions. First, you know, sequentially our yield has increased and that’s particularly come from equity yields doing better where you also mentioned that we have increased — we’ve changed some distributor payouts. Now what I want to understand is this recurring or is this one-time in nature?
Second, on the on the market-share bit, our equity market-share sort of continues to slide. Yeah, despite we have actually done two NFOs this quarter. And if I’m not wrong, we collected almost INR1,410 plus crores. So if I adjust for that, what is your sense on net inflow, market-share ex NFO or in continuing schemes, like what is our market-share and are we sort of improving on a quarter-over-quarter basis or so — or do you say — and in your opinion, is this decline in-market share more because of performance needs to catch-up or more because our market-share and net inflow needs to catch-up. So that is my second question.
And third, on the current trends like SIP cancellations have picked-up, also given this volatility, is the industry — I know the industry will probably witness a higher SIP cancellations. But maybe you could talk a little bit about what are we seeing in our current trends in terms of SIT numbers holding up so-far or cancellations actually picking-up even more in this month so far? And how would you see investor behavior in this sort of situation over the next two, three months if, let’s say, the markets were to sustain in this way. So yeah, those would be my broad three questions. Thanks.
Prakash Bhogale
I wanted to ask, so Madhukar, on the yield side, marketing and distribution expenses, which we have realigned based on the current market situation, it’s in the face where you may see some impact in the next quarter also and there may be — the yield will more or less remain in the same range.
Madhukar Ladha
Okay. So it’s a not a one-off.
Prakash Bhogale
Yeah so we are doing it in a phase manner Madhukar.
Madhukar Ladha
Okay. So the equity yield will probably sustain at about 71 bps as you mentioned earlier in the call.
A. Balasubramanian
Madhukar, so what Prakash is saying, so these current yields may be there for maybe for next quarter is a one-off a case for one or two quarters.
Madhukar Ladha
Understood. And then you’re back likely to come back to the 67, 68 basis.
Prakash Bhogale
Yeah.
Madhukar Ladha
Okay. Okay. And what is causing this? I mean, I didn’t understand what causes this actually.
Prakash Bhogale
So like Prakash explained, this is the realignment of certain marketing and selling expenses, which is the regulatory guidelines. So Madhukar, we have made some provisions so that we have — so that we have realigned.
Madhukar Ladha
Yeah. So that we will not be incurring anymore, because we are cutting back on that, is it?
A. Balasubramanian
Correct. Okay. Second, on your other two aspects. See, as far as the sales number is concerned, of course, the market-share the way I see is the overall market shares, as far as the equity is concerned, on a quarter-on-quarter basis, the fall in-market share is now getting better. That’s one-way I’m looking at it. And second is the incremental net sales and some of the funds where we are only seeing outflows for a variety of reasons, some of our traditional funds where we are seeing net sales improving, which includes our fund as well as the large fund and a few other funds which are in the main categories like gain fund, including our thematic funds such as Advenual plus, GenX funds where we are seeing continuous flows.
And these are — each of these categories we take. I think there’s some other categories are getting inflows those category — against those categories, the net sales would be in the range of about 4%, 3% to 4% kind of saying that. But there are certain schemes, of course, ELS is a category we are seeing outflow and that is largely on account of category itself has not been getting any case being inflows. And on-top of it, a performance-based outflow that we have witnessed given the fact that we have large-size. But there we are seeing outflows, but that’s something getting reduced each month-on-month basis.
Our idea is actually to identify, as I mentioned earlier, focus fund, whether we call it, five funds, we have taken focused funds on the diversified nature and three funds on the thematic we are identified and driving it across the country to improve our numbers, that’s something we should see it being driven from a sales point-of-view. But from the cancellation of FAP other things point-of-view, as it stands today, anyway in the last two, three months, the — in general, the SAP’s top-line number keeps rising. The cancellation number generally in the range of about 40% to 50% and this number may even go up little 65%. And again, it’s a function of market trend that you are seeing. But that’s something should not necessarily bother anyone given the fact that on these numbers they can do come back by way of gross numbers and then new customers are reaching coming in, we still have only about 5.5 crore unique customer-base. We have about 75 customer-base. So given the fact that the unique customer-base can continue to rise, but these numbers should not ultimately lead to any different kind of output, except the ratio could change given the current market volatility if it sustains for, say, one or two quarters as we move forward.
Madhukar Ladha
Understood. Sir, just like a follow-up, sir. You know on a quarter-on-quarter basis, like from quarter two to quarter three, yeah, I wanted to understand if we were to exclude the NFO flows, is our market-share improving in net inflows?
A. Balasubramanian
Yeah, there are certain scales is improving.
Prakash Bhogale
Yes. So Madhukar, in the quarter three, we have received — we have seen the improvement in the net sales ex NFO also which has resulted in the improvement in the market-share.
A. Balasubramanian
Yeah.
Madhukar Ladha
Understood. Okay. That’s positive. Thank you, sir. All the best.
A. Balasubramanian
Thank you, Madhukar. Yeah.
Operator
Thank you. Ladies and gentlemen, due to time constraint, that would be the last question for today. And I now hand the conference over to the management for closing comments.
A. Balasubramanian
Yeah. And thank you everyone for joining. And with this, we conclude our Q3 FY ’25 earnings call and do feel free-to reach-out to our IR Head, Prakash Bhogale, for any queries that you may have. Thank you.
Operator
[Operator Closing Remarks]