HDFC Asset Management Company Ltd (NSE: HDFCAMC) Q3 2026 Earnings Call dated Jan. 14, 2026
Corporate Participants:
Simal Kanuga — Chief Investor Relations Officer
Naozad Sirwalla — Chief Financial Officer
Navneet Munot — Managing Director and Chief Executive Officer
Analysts:
Kushagra Goel — Analyst
Mohit Mangal — Analyst
Devesh Agarwal — Analyst
Sucrit Patil — Analyst
Dipanjan Ghosh — Analyst
Divij Punjabi — Analyst
Madhukar Ladha — Analyst
Gaurav Jani — Analyst
Abhijeet Sakhare — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY26 Earnings Conference Call of HDFC Asset Management Company Limited. 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. [Operator Instructions] Please note that this conference is being recorded.
From the management team, we have Mr. Navneet Munot, Mr. Naozad Sirwalla, and Mr. Simal Kanuga. I now hand this call over to Mr. Simal Kanuga, who will give us a brief, following which we will proceed with the Q&A session. Thank you, and over to you, sir.
Simal Kanuga — Chief Investor Relations Officer
Thank you very much. Good evening, everyone, and appreciate you all joining this call. We trust you have had an opportunity to review our presentation. I’ll begin with an overview of the industry. As of 31st December 2025, the total AUM stood at INR80.2 trillion. Equity and equity-oriented net new flows continued to see healthy momentum during this quarter, adding another INR1,188 billion. For the calendar year 2025, net inflows into this category added up to INR4,752 billion compared to INR5,420 billion in 2024.
In aggregate, over the past two calendar years, net new flows have exceeded INR10 trillion or approximately USD115 billion. Systematic investment plans remained a key structural driver for the industry. Monthly SIP inflows reached INR310 billion in December 2025, highest levels recorded to date. The SIP asset base increased to INR16.6 trillion, accounting for over 20% of industry AUM and significantly higher proportion of equity and equity-oriented AUM.
For calendar year 2025, total inflows from SIPs amounted to INR3.3 trillion. Debt funds saw net outflows of INR163 billion during the quarter, while liquid funds witnessed net inflows of INR147 billion, an additional INR112 billion came in arbitrage funds. Quarter ended December witnessed INR327 billion of net new flows in gold and silver ETFs. This category now contributes to the tune of 18% of industry ETF AUM.
We now move to [Indecipherable]. Overall, QAAUM crossed INR9 trillion while equity-oriented AUM exceeded INR6 trillion resulting in an asset mix with equity at 65.5%. The number of unique investors for the industry increased by 6.4 million as compared to December 2024. For us, this increase was 2.8 million, taking our total unique investor to 15.4 million, a penetration of 26%. Systematic transactions which includes SIP and STP reached INR47.3 billion in December 2025 representing a YoY growth of 24% or an absolute increase of INR9.1 billion.
Turning to our PMS business. AUM crossed INR50 billion during the quarter. We also secured couple of large mandates during the quarter. In Alternatives, we completed the first close of our structured credit fund, raising commitments of approximately INR13 billion from institutions, family offices and UHNI investors.
Now onto financials. Total revenue for the quarter was INR12,332 million. Operating revenue came in at INR10,743 million, a growth of 15% YoY. Other income was INR1,589 million. Total expenses were INR2,186 million. As a result, operating profit for the quarter was INR8,557 million with an operating margin of 36 basis points. Profit after tax stood at INR7,701 million, translating into a YoY growth of 20%.
So, thank you very much for patient hearing. Navneet, Naozad and I are here to take all questions. We can start building the question queue, please. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] We will take our first question from the line of Kushagra Goel from CLSA. Please go ahead.
Kushagra Goel
Hi, sir. Thank you for taking my question, and congrats on a good set of numbers. Just had one question. So your operating profit margin that sort of went up by 1 bp or so, so 35 bps went to 36 bps. So just wanted to understand if there was some specific reason. I see your other expenses was materially lower, but just wanted to understand more on that.
Naozad Sirwalla
Yeah, hi, Kushagra, Naozad here. So other expenses, you’re right, it’s from a quarter on — quarter-over-quarter basis gone up by a basis point. That’s largely because other expenses were lower for this quarter. Previous quarter, we had a larger expenditure on CSR. Also certain marketing, business promotion expenditures slightly more in the previous quarter as compared to this quarter. So that’s done.
Kushagra Goel
Got it, sir. Also, just one more question. In terms of your growth momentum, how do you see it going forward? If you could share some guidance or something on that, sir. That’s all, thank you.
Naozad Sirwalla
Growth in context of…
Kushagra Goel
In general for the industry and how do you see HDFC placed if you could [Speech Overlap]
Naozad Sirwalla
And how are we placed?
Kushagra Goel
Yeah, yeah. Like share some thoughts on that aspect.
Naozad Sirwalla
No. Sure. So you would have seen the latest number on the SIP where they crossed INR31,000 crores in the month of December, despite the fact that there has been quite a bit of volatility in the market and returns have been muted for last 15, 18 months. But I think the momentum in the SIP book has been continuing. Industry has been adding more number of investors, more number of folios month after month, quarter after quarter. We have been participating very well. There is a slide on our new account addition, our new investor addition and you can clearly see that we’ve been participating very well across all channels, across all geographies, across all asset classes and products. And I feel like very optimistic on the overall industry growth for next several years.
Kushagra Goel
Sure. Got it. Thank you.
Operator
Thank you. We’ll take our next question from the line of Mohit Mangal from Centrum. Please go ahead.
Mohit Mangal
Yeah, good evening. Thanks for the opportunity and congratulations on a strong set of numbers. My first question is on the PMS and AIF. So I think you have put a separate slide on that. So I’ve got two, three questions within that. So first is basically just wanted to know what is the NDPMS and PMS fee, if you can just separate it. Second is that how big is this EPFO mandate? And thirdly, if you can tell me the growth overall in the PMS and AIF segment.
Naozad Sirwalla
On the PMS side, we have two segments, discretionary and nondiscretionary. We have been adding accounts and growing on both sides. We are focused on the — both sides. On the EPFO and SPFO mandate, as you would appreciate, this segment operates with very, very tight economics. It’s very competitive. But these mandates allow us to participate meaningfully in the ecosystem. We build execution capability, we announce our platform, and gives us an opportunity to offer that product to many other clients in the same segment and related segment. So we see this as a strategic phase where capability building and scale take precedence over immediate margins from a quarter-to-quarter perspective.
Mohit Mangal
Okay. So [Speech Overlap]
Naozad Sirwalla
I think Simal mentioned earlier that we have crossed the INR5,000 crore number in terms of AUM, apart from these two mandates, where I think we are in the process of signing and executing the agreement et cetera. So they will get executed in some time. But on the team side, we have hired senior resources across investments and services that will help us build this business. So PMS on the fixed income side, on equity side, both discretionary and non-discretionary, we would like to build that gradually.
Mohit Mangal
What’s the vision on Alternatives?
Naozad Sirwalla
On the overall Alternatives, so most of you are aware about the first VCP fund of fund. You might have seen the recent announcement. We announced the first close of our structured credit fund. And what humbles us is our partnership with IFC. We are very proud of our partnership with the IFC, they’re coming as the anchor investor. The fund has declared its first close, and has raised commitments of about INR1,290 crores. And another feature of that INR1,290 crores is that almost 70% has come in from investors who have contributed INR25 crores or more. So underscoring strong participation from ultra-high-net-worth individuals and institutions in the fund. So we’ve got institutions, family offices, ultra-high-net-worth individuals participating in that.
And IFC as a partner and anchor investor will contribute up to INR220 crore to the fund. Our partnership with IFC is rooted in a shared vision of expanding access to financing for mid-sized corporates — mid-sized enterprises that drive manufacturing output, that drive employment, that drive regional development. And this is the first step in what we think will be a long and meaningful journey of working together, developing the private credit market on India. And overall on the private market side, we have been engaging with lot of other global institutions and domestic institutions. The team is working on creating a second fund on private equity and venture capital front. We did that first VC and PE fund of funds and large part of that is already committed, and we would soon be coming with the second fund. And we’ll be engaging with few large global institutional clients for that as well.
Mohit Mangal
Understood, sir. This is very helpful. So just one follow-up, sir. In terms of PEs, sir how much our discretionary PMS earns and while how much our non-discretionary PMS earns, if you can just throw some light on that?
Simal Kanuga
No, we have not kind of given those yields out.
Mohit Mangal
Okay, understood, sir. Thanks, and wish you all the best.
Simal Kanuga
Thank you.
Naozad Sirwalla
Thank you so much.
Operator
Thank you. [Operator Instructions] Next question is from the line of Devesh Agarwal from IIFL Capital. Please go ahead.
Devesh Agarwal
Good evening, everyone, and thank you for the opportunity. So, my first question would be on the asset class yield for the quarter. Could you just share those numbers?
Simal Kanuga
Yeah, sure. So equity is around 56, 57 basis points. This includes index funds. Debt is 27, 28 basis points, and liquid would be 12, 13 basis points. And the blended yield is around 45 basis points.
Devesh Agarwal
Blended you said is around 45 basis points, 46 basis points.
Simal Kanuga
For the quarter is 45 basis points. For nine months, it’s 46 basis points.
Devesh Agarwal
Right. So we see that overall the yield number has been decently resilient over the last six quarters. I’m assuming if we remove the passive from the equity, the active would be closer to 58, something around that number. So despite the growth in the AUM, we are seeing this resilience. So is there anything to read into this?
Naozad Sirwalla
You know us well. For us scale and quality, profitability, all three are important, and we don’t sacrifice profitability just for market share or for scale. For us, that’s very critical. We’ve been able to maintain it very well. And overall operating margins also, I think seeing a tight leash on the cost side, we have been able to maintain operating margins, despite, of course, the telescoping pricing has an impact, but we’ve been trying to kind of like impact through the tight [Indecipherable].
Simal Kanuga
Sorry, sir, your audio was not very clear. Can you just repeat the last part, please?
Naozad Sirwalla
I’m saying, of course, there’s an impact of telescoping pricing. As market goes up, there would be impact on the fund level or overall asset class-level margins, but the overall operating margins we’ve been able to maintain well with tight leash on cost.
Devesh Agarwal
So that is exactly what I wanted to understand that the impact of telescopic pricing has not been visible. So what is that we are doing to offset that impact or what is leading to that impact not being visible? And how do you see the trajectory going forward? We think these yields will remain steady at this level, so we are expecting that for a 10%, 20% — 10%, 12% growth in AUM, there will be some decline in the yield?
Naozad Sirwalla
No. So on the equity margins, I mean I mentioned that some degree of compression is inevitable over time because you have a sliding scale structure of TER, which naturally leads to lower expense ratio as the AUM scales. So we are conscious of this dynamic, and therefore make this reality into our pricing decision on the incremental and the new flows. So they constantly keep getting adjusted on the new flows. And now new flows are also becoming sizable. So a couple of years, they also make an impact. But as I mentioned earlier that despite the impact of telescoping pricing, we have been — I mean, so far we have managed to keep our margins in the 33 basis point to 36 basis point range.
That reflects like disciplined cost management as well as the operating leverage. And you ask like going forward, so we’ll continue to work hard to maintain margins within this band. We recognize that this is easier said than done. But I’ve mentioned this earlier that margins are only one way of looking at the business. We keep a close watch on that, but the real focus has to be on growing absolute profits in a sustainable way. And as long as profits continue to compound, I mean, we were comfortable with how the business is evolving.
Devesh Agarwal
Right, sir. And sir, what is the impact of the two regulatory changes that are expected to go live from 1st of April? One is what is the gross impact and how do you see how this will be passed on?
Naozad Sirwalla
Sure, Devesh. So what has changed? Firstly, removal of 5 basis point of additional TER which AMCs were allowed to charge in lieu of exit load. So exit load since 2012 was going to the books of the fund. Once the new regulations come in play, this is gone. The impact for the industry as a whole is definitely material. So active equity-oriented mutual fund industry is at INR44 trillion, and 5 basis point on that comes to about INR2,200 crore. So to put numbers in context, for FY25, total operating profit of the industry as a whole was around INR16,000 crores. So this is definitely material.
Second change in the expense ratio construct. So rather than all statutory levies which are inbuilt and as part of the TER, now we have base TER plus statutory levies. So methodology or for that matter accounting has changed. The slabs have been accordingly readjusted, realigned. You would have seen the new slab table. The smaller schemes will benefit to an extent because of this change and will largely set off the loss due to 5 basis point reduction, which I spoke about earlier.
Lastly, third thing is the rationalization of brokerage limits what we pay on our transactions. So this is in reference to brokerage we pay to buy and sell securities. So brokerage for cash market transactions is now reduced to 6 basis points from the cap of 12 basis point earlier. But this 6 now excludes levies, so comparable number to 12 is now some 8.5 basis point odd. So between the first and the second point, that is the 5 basis point and GST et cetera, few of our larger schemes will see an impact that is reduction in TER.
Smaller schemes less affected as TER reduction due to this 5 basis points going away is largely offset by redefined slabs. Larger schemes definitely are getting impacted. Actually, you’ll be surprised Devesh that many of the smaller schemes will see increased TER. So we are evaluating the way forward with an objective to contain the financial impact if any. All I can say is that you have precedence on how we handled the same in 2019. We understand the sensitivity and will optimize to the finest in terms of impact on margins.
The positive side of this change if I can highlight, one is reduced TER, and hence even better alpha, so clearly in favor of larger sized funds. I mentioned this several times earlier that the larger funds because of the telescoping pricing charge lower TER, and the alpha keeps getting baked in. So the long-term positive impact of this in my opinion is not as well understood. So I mean, I can say classical bitter pill theory, long-term good for the alpha. So my investment team is smiling for sure. The positive aspect is that regulator and industry always focus on enhancing transparency [Technical Issues] another step forward where one knows what the fees and what the statutory levies. To sum it all up, we’ll work on managing financial impact, and on the other hand, further optimize alpha for our investors.
Devesh Agarwal
Right, sir. [Speech Overlap] Yeah, absolutely, sir. And one final one, sir. What are the plans for the schemes that were managed by Roshi? I know currently those have been allocated within the team. So that is how it’s going to be? Or we are looking to hire what exactly are the plans?
Naozad Sirwalla
So I mean you have heard the change in the fund manager [Technical Issues]. And so I mean, you would also know Amar Kalkundrikar who joined us few months back. He was with us for over 15 years, left us for few years and has come back as senior fund manager. I think he’s managing almost like INR40,000 crores or so across new fund. Maybe let me take this opportunity to talk about the overall investment team, Devesh, if you allow me. I’m sure many of you would agree because several of you also interact with all of my colleagues on the investment side that we are one of the most experienced investment team in the industry. And not only experienced, but an enviable long-term track record across market cycles. All of them have seen multiple market cycles and have done well.
So on the equity side, we have head of equities and senior fund managers who manage the diversified funds. Least experienced among these would be like 20, 21 years of industry experience. And over and above, we have a team of analysts. Several of them are designated fund managers for their respective sectoral and thematic funds. Clearly, like among the most experienced team in the industry, we take deep pride in them. Some of them have started managing more diversified mandates. You are aware like Anand Laddha has been managing our value fund. So I think a firm that has been around for 25 years, we have seen transitions in the past, and our view is that we have handled the same extremely well. We continue to expand our team and remain like very confident.
Devesh Agarwal
All right, sir. Thank you so much and all the very best.
Naozad Sirwalla
Thank you.
Operator
Thank you. Next question is from the line of Sucrit D. Patil from Eyesight Fintrade. Please go ahead.
Sucrit Patil
Good evening to the team. I have two questions. My first question is to Mr. Munot. First of all, congratulations on the quarter. With HDFC AMC’s strong brand and evolving investor stock presence, how do you see the next two, three years shaping up in terms of product innovation and investor engagement? Especially as passive flow rises and digital platforms reshape the distribution, what should the stakeholders expect as the defining theme from your leadership in this space? Yes, sir, thank you. That’s my first question. I’ll ask my second question after this.
Navneet Munot
Sure. So first question is on the overall product pipeline. So if we look at our product portfolio, I think it’s largely complete across the key categories. Whether you look at active equity, fixed income, money market, both on the active side, passive side, we are more or less complete. From time to time, we may look at select sectoral or thematic funds, but only where the investment team has strong conviction and sees a clear opportunity. And these launches are likely to be like few and far between. But otherwise, I think we have a best-in-class product portfolio with long-term track record. And we continue to focus on like all of them. And if we are talking about the overall platform, then apart from the mutual fund, we continue to enhance our PMS, AIF, International GIFT City offering because these platforms allow us to address a wider range of client requirement. So I think the overall approach is to deepen and strengthen what we already have and add selectively where it generally makes sense. Your second question was on…
Sucrit Patil
Hello?
Operator
Sucrit, yes.
Sucrit Patil
Yeah, yeah. So my second question is to Mr. Naozad. On the financial side beyond margins, how are you thinking about capital efficiency in this space balancing shareholders returns or any tech investment or any cost structure discipline in place? Do you see the scope for a shift in deployment priorities as digital adoption accelerate? Yeah. Thank you.
Naozad Sirwalla
From a deployment of capital towards digital, I think that’s an ongoing process. We continue to invest in technology and digital platforms over the years, that’s already baked in whether it’s in the form of certain CapEx or largely to the OpEx. So that doesn’t really change. From the balance sheet utilization of cash, if that’s what your question is to, our dividend policy — sort of our dividend payout for last two years have been almost close to the entire post-tax cash profits that we generate as a business we have paid out. That’s what the Board has done for the last two financial years. We have also used capital to good effect to seed our alternate platform. So we are a material investor in our Alternatives fund of fund that we launched couple of years ago.
You would have probably read, and we discussed in the credit fund that we have just announced the first close. Again, the asset management company has meaningfully committed around 14% of the corpus is committed by the balance sheet of the asset management company. So we will use the balance sheet judiciously for seeding businesses. And the third option of strategic acquisition stroke, any kind of enhancement always is on the table. We do have a look at a lot of transactions that happen in the market. So whenever the time, the pricing and the business works out for us, we look at that as well.
Sucrit Patil
I think that’s good guidance from your part and best of luck for next quarter. Thank you.
Operator
Thank you. Next question is from the line of Dipanjan Ghosh from Citi. Please go ahead.
Dipanjan Ghosh
Hi, good evening, everyone. So just a few questions. One, you kind of articulated on your investment management bandwidth, but let’s say since the time, this news regarding Roshi exiting some of — the company and some of the funds kind of being in a transitionary phase has been floating around, let us say over the last two, three months in terms of flows into this particular funds, if you can give some granular understanding of how the trajectory has been? And also in terms of your communication to the distributor or interactions with the distributor, has there been any back and forth in terms of customer interactions or some negative sentiment floating around?
My second question, you mentioned that on the MF circular, you will be kind of following a similar practice to that of 2019, and to the finest possibility, you will be trying to mitigate most of the impact. But, internally, have you kind of deliberated what can be, let’s say, the worst-case scenario or despite all the mitigates and whether you’re confident of let’s say mitigating the entirety like you did in 2019? And the third and last question is on the alternatives business. Obviously, you have launched a few funds over the last two or three quarters. If I were to take more of a long-term view, let’s say over the next three to five years, what sort of AUM or revenue mix do you really aspire from this segment? Yeah, so those were my three questions.
Navneet Munot
Sure. So first on the one fund managers, if I can really appreciate, I mean we have been around for 25 years and we have seen transitions in the past. And I think we have handled it extremely well. You would give us the credit. I mean we had a legendary CIO, [Technical Issue] have been and will always remain in deep gratitude to him for what he has built and what he has done. But at the same time, the strategies that were managed by him, some of them are the ones which have seen the highest growth at our end in last couple of years. And the overall team’s experience, the pedigree, the overall quality of our research, the quality of our risk management, governance, long-term orientation, fundamental research and all of that, I don’t have to overemphasize on that.
So while we do everything in our power to retain talent across the organization, and not just in the investment team. But we have handled a few transitions here and there very well and we remain very, very confident. I also mentioned about, like, I mean, one of the fund manager who was with us for 15 years left us and has come back. You will see, like you’ll hear some of the, I mean some of the funds getting managed by fund managers who are — I mean the current analysts who are managing sector and thematic funds, increasingly managing diversified equity funds because they have handled size for couple of years. And we continue to remain on the lookout for at any point in time we see a differentiated skill set who fits in nicely within the culture that we have, within the team that we have and the setup we have, we would continue to build our investment team and we’ll share more on this as we go ahead, yeah.
Your second question was on…
Naozad Sirwalla
TER, how do we optimize it?
Navneet Munot
Yeah, I mentioned earlier that, I mean 2019 is a classic example. You can go back and see the playbook, how we handle the same. We understand the sensitivity around it, and we will optimize that in terms of impact on the margins. Yeah.
Naozad Sirwalla
Also, I think Dipanjan, if you look at versus 2019, the magnitude this time is much smaller, right? That time we had an impact of nearly 25-odd basis points. And what Navneet touched upon earlier, this time there is a 5 basis — some of the smaller schemes are seeing realignment of expenses and thereby the kind of reduction out there is virtually very, very small or in some cases even zero. So I think net-net, this time in terms of prudently managing, we think we’ll be able to handle it well.
Navneet Munot
On your third part on the Alternatives, et cetera, so it would be pertinent for me to state that the core business itself, where we have done reasonably well over time, that continues to grow and we’ll put in all the effort, time, money, everything for that to see continued growth across equity and across active and passive. But beyond our mutual fund business, we do have our eyes well set on whether it’s PMS, whether it’s Alternatives, whether it’s International business. We have taken meaningful steps over the last couple of years to build these businesses, I mean building their very, very solid foundation brick by brick. But you would appreciate like, I mean we have grown our business with a sharp focus on quality, scale and profitability. So even beyond our mutual fund business, whatever we are doing, we intend to replicate this approach. So in PMS, Alternatives, International, build meaningful, high-quality and profitable platform that strengthen the overall franchise over the long run.
Dipanjan Ghosh
Got it. Thanks, everyone, and all the best.
Navneet Munot
Thank you.
Operator
Thank you. [Operator Instructions] We’ll take our next question from the line of Divij Punjabi from Banyan Tree Advisors. Please go ahead.
Divij Punjabi
Yeah, hi. Thanks for the opportunity. I just had one question. So on the passive segment, we have been seeing good growth momentum. So can you talk about the underlying factors that are leading to this from the investors’ point of view?
Navneet Munot
Sorry, what was the question….
Divij Punjabi
On passive, what is leading to growth? What is leading to growth momentum from underlying investors’ perspective?
Navneet Munot
I mean a large part of that growth is from some of the institutional mandates. As you are aware that EPFO and some of the other pension and provident funds have been investing into some of the ETFs, and of course, the exempted funds also invest in those funds. Then you have some of the insurance companies participating in couple of products. And recently we have seen a significant growth in gold and silver ETF and fund of fund. So some of these are the categories. We have been a pioneer, on the index fund side, we were one of the first one to launch those products, and they’ve grown meaningfully. In fact, I mentioned this earlier that on the equity index fund, our market share on the passive side is higher than what we have on the active side.
And then again, the value of the brand, franchise, distribution, all of that really matters. And of course, investment performance there is more about the tracking error than the alpha. So there is preference among some of the customers and advisors for mirroring the market. And we have a very comprehensive product portfolio and a full setup to make the most of it. And I’ve always mentioned that our idea is that wherever investors and our partners want to participate in the market, be it on the active side or on the passive side, and I’ve spoken a bit about Alternatives, I mean we are like fully ready. For us, the core strength that we have as an organization is our investment management capability, our risk management capability, and our product management capability. And we continue to sharpen that. And whether an investor come through any route, I think we have the best-in-class product offering for everyone.
Divij Punjabi
Sure. And from a medium-term perspective, any insight on where we see that going? Like currently it’s around 10% of the annual mix from maybe three- to five-year perspective, where do we see this going?
Navneet Munot
A couple of times, I don’t know on invest call or maybe in some other forums, I’ve given parallels between the asset management industry growth in US from ’80s onwards and what we are seeing in India over the last couple of years. I think over the next several years, we are going to see significant growth in asset management. So formalization of the economy, digitalization of the economy, financialization of savings, financialization of assets, all of these are like structural trends. And over a period of time, we will see like newer asset classes emerging, people investing one like mutual funds which has been like time-tested, beautiful product with a track record.
Some of the fund houses like ours have a track record going back 30 years. Some of the investors may like to participate through passive within that, either the index fund or the ETFs. We are seeing some of the other asset classes, whether it’s REITs, InvITs. Private markets, I talked about our plans on the Alternatives side to participate in the private markets. Almost all the segments are likely to grow. And you can see from ’80s onwards how several of these segments have grown in US, and maybe I think in terms of the size of the economy, size of the market, structure of the market, several of those were like very similar.
And I think credit to our regulators who have been very pragmatic and have been deeply focused on investor education and investor protection. I think if we continue to do a good job on that, there is significant growth potential on all segments. So people ask me like active versus passive, how this will grow? And I say I think — I hope that in my lifetime I don’t have to answer that question. In my lifetime, it will remain active and passive rather than active versus passive.
Divij Punjabi
Sure. Thank you.
Operator
Thank you. We take our next question from the line of Madhukar Ladha from JP Morgan. Please go ahead.
Madhukar Ladha
Hi, good evening. Congratulations on a good set of numbers, and most of my questions have been answered. Just wanted to understand, did you disclose the asset class wise yield this time around as a data keeping question I wanted that. And it would be fair to assume that given this changes in the whole TER calculation system and the 15 basis points reduction and excluding the statutory levies, especially on that change, would we be able to sort of — would that be a neutral to our P&L, especially on that specific change or my sense is that it should largely be neutral, but just — I wanted to just confirm that.
Naozad Sirwalla
Madhukar, repeating again that, I explained in detail that larger schemes definitely are getting impacted, and I also mentioned that you’ll be surprised that many of the smaller schemes will see increased TER. At our end, I’ve said that while the reduced TER means higher alpha and particularly for the larger-size fund, and there is a long-term positive implication of that. But on the other side, whatever little impact of the reduction on account of exit load or the expense ratio construct is there, we will optimize it to ensure that we remain highly focused on our profitability.
Madhukar Ladha
Right. So if we were just to look at the — if you were to exclude the exit load construct and only look at this reduced TER. So there also we would see a little bit of a negative impact is what — is that what you’re saying? And then obviously we would take compensatory steps.
Naozad Sirwalla
[Speech Overlap] Madhukar, it would be both ways, right? Some — in some of the…
Madhukar Ladha
Yeah.
Naozad Sirwalla
We have positive impact. Some of the schemes, there will be negative impact. So as Navneet touched upon earlier, we’ll optimize on both sides and make it sure that the net margins that we speak of remain within the acceptable band.
Madhukar Ladha
Understood. Understood. And the asset class by yields, sorry, I joined a little late, I may have missed that earlier. Yeah.
Navneet Munot
Yeah, Madhukar, we did give that earlier, but I’ll repeat it for your benefit. So equity yields came at 56, 57 basis points. It includes index funds, debt yields between 27 basis points and 28 basis points, and liquid between 12 basis points and 13 basis points.
Madhukar Ladha
Okay. Got it. Thanks and all the best.
Operator
Thank you. Next question is from the line of Gaurav Jani from Prabhudas Lilladher. Please go ahead.
Gaurav Jani
Thank you and congratulations on a strong quarter. Two questions. One is, I don’t know if you’ve laid this out. Is there a new ESOP issuance? And can you just elaborate as to then what is the ESOP cost that will look like?
Naozad Sirwalla
So yeah, the question is on ESOP cost, right?
Gaurav Jani
That’s correct, sir.
Naozad Sirwalla
So I’ve given it out in the previous calls as well. So the non-cash expense on account of ESOPs for the full year would be about INR68 crores. For the first nine months, it’s about INR47 crores.
Gaurav Jani
So that doesn’t change, right? I mean whatever estimates were given that doesn’t change. There’s not a new ESOP issuance, right?
Naozad Sirwalla
So we will — so what — so the material ESOP issuance happened last year. But as and when additional resources and people join us, we’ll have small incremental issue on this. Today also we announced a small issuance. So that’s an ongoing process, that will continue. But that will not change this expense estimate we’ve given our previous quarter very materially.
Gaurav Jani
Understood. Thanks. And secondly, sir, Navneet, sir, to you, you did mention of the 5 basis point impact on the overall AMC profits. Just wanted to kind of have your opinion as to how are we thinking in terms of passing that on and what is the dialogue with distributors?
Simal Kanuga
He is saying how are we looking at doing it?
Navneet Munot
No, it is — it will depend on the size of the scheme and of course, wherever there was an additional TER, I mean additional charge of that exit load, it is not the overall impact of 5 basis point on the AMC profitability. I gave that detail — I mean, detail — I explained that in detail earlier.
Naozad Sirwalla
Yeah. So it’s not — I think you said the impact for us is 5 basis points. That’s not what Navneet has said.
Gaurav Jani
No, I did understand. I do understand that. I was just trying to engage us towards the dialogue with distributors as to how will the — can there be some pass through or not?
Navneet Munot
Yeah, I mentioned it a couple of times that we will try to optimize and maintain our profitability.
Gaurav Jani
Sure, sir. That is it for me.
Operator
Thank you. [Operator Instructions] We’ll take our next question from the line of Abhijeet Sakhare from Kotak. Please go ahead.
Abhijeet Sakhare
Hi, good evening, everyone. I just have one slightly hypothetical question. Would you say that it’s easier to cut commissions in better performing funds generally rather than throughout most of the funds? I mean just over the cycle, if one has to understand, how easy it is to pass on some of these regulatory impacts or just the initiatives to protect profitability better.
Navneet Munot
I mean we always try to make it win-win for everyone, I mean, whether for our investors, for our distributors and for our profit, I mean for us. And we have demonstrated that over a long period of time. You’ve watched us over the years, and we’ll continue to do a good job hopefully on that.
Abhijeet Sakhare
Okay, got it. Thank you so much.
Operator
Thank you. Next question is from the line of Madhukar Ladha from JP Morgan. Please go ahead.
Madhukar Ladha
Hi. Thank you for taking the follow up. I wanted to get a sense of what has been the ramp up from the HDFC Bank channel, and any update on how this channel could contribute even more to AUM? Yeah.
Navneet Munot
Sure, Madhukar. So firstly, as you all know, and I think HDFC Bank has been vocal about the fact that bank has been and will continue to be an open architecture. Whether we like it or not or whether this is the right thing to do or what other competitors are doing, this is a given. Of course, there is a positive rub off with them being our parent and same brand. So not only from customer perspective, but even from relationship manager perspective, there is higher comfort in offering HDFC mutual fund product which is visible in our market share in their AUM. So in equity AUM, our overall market share at the industry level is 13%. But if you look at what HDFC Bank has sold in that, it is somewhere in the late 20s.
Also this whole open architecture leads to material, so-called, event-based or seasonal challenges. So for example, in a particular quarter when some of our peers have large NFOs and our parent bank participates actively, it impacts our flow market share in that particular quarter. But the team has constantly been working on furthering our ties and offering best-in-class products. SIP, in particular, continues to be an important area of focus for us and even for this relationship, I mean, HDFC Bank, HDFC AMC relationship. So our share of SIP flows through the HDFC Bank channel is meaningfully higher than our overall book share with the bank.
That reflects the emphasis on long-term investing and the quality of customer engagement coming through this channel. So this, in my opinion, will lead to increased AUM market share over time because the SIP buildup will only show over a period of time. But this aligns very well with our long-term objective. So bank continues to be a very important distribution partner for us. It is a behemoth, and given our relationship, we work with the bank very closely, and at multiple levels and will continue to further our share with them. I mentioned in last couple of quarters, we have built a dedicated team internally that works only on this channel, and there’s a lot of, I would say, interaction between our digital team and bank’s digital team, the marketing team, so on and so forth apart from the sales channel.
So the whole objective of deepening engagement and expanding the relationship in a consistent sustainable manner. I should also mention that our relationship with HDFC Securities on that, that Dheeraj and team are working closely with us on various initiatives. So as a result, our share of flows through HDFC Securities is higher than our AUM share, reflecting the traction that we are gaining. But overall, yeah, there has been increased engagement, and bank is a distribution powerhouse, and with the bank familiarity and the relationship period of time, it will reflect in the numbers. But we are happy with the SIP buildup.
Madhukar Ladha
Great, great. Congratulations, and all the best.
Navneet Munot
Thank you.
Operator
Thank you. Next question is from the line of Mohit Mangal from Centrum. Please go ahead.
Mohit Mangal
Yeah, yeah. Thanks for the follow-up. So actually I was looking at the last 10 to 11 quarters market share, and we have been quite stable in equity as well as debt, but liquid we have kind of lost the ground from 13%, 13.5% to around 11-odd percent. So just wanted to know your thoughts as to how we can increase the market share in that segment?
Navneet Munot
I think it gets impacted by few of the large corporate investors or institutions, kind of like any large movement of one client versus the other with one fund house versus the other. But I don’t read much into that otherwise because sometimes I mean share may look lower because some client where we are capped out in terms of total amount as per their internal policy have invested further amount and that amount hasn’t come to us. And you can also see a reverse happening in another quarter where some other large institution has increased allocation to us. But the overall institution team is on the ball and are focused on getting the maximum allocation. I can also share that we have hired a senior person recently who has now been made responsible for pan India institution business apart from some of the other emerging channels that we are setting up.
Mohit Mangal
Okay, understood. Secondly, again on the distribution channel, so we are seeing basically a direct — the share increasing within the equity AUM. So like you have been telling over the last few calls that Fintech has a major role to play. So I think that story continues.
Navneet Munot
Yeah, yeah. So I think Fintechs have been growing quite rapidly over the last couple of years, and it’s become a vital distribution channel for the mutual fund industry. They have played a very big role in expanding the reach and accessibility. In fact, Fintech as a group have registered 25 million SIPs in the nine months of the current financial year gone by. And we have successfully built a strong presence on leading platform, securing a notable share both in new flows as well as SIP registrations, we share very good relationship with all the larger ones, and of course, some of the emerging ones. That was the question, right? Yeah.
Mohit Mangal
Yeah, yeah, yeah. Understood. Thanks, and wish you all the best.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand this call over to Mr. Navneet Munot for closing comments. Over to you, sir.
Navneet Munot
Thank you. So to wrap up, our total assets crossed INR9 trillion with equity assets exceeding INR6 trillion. We now serve over 15 million unique investors with a penetration of 26%, reflecting the breadth of our franchise. And our objective at HDFC AMC remains clear, to be a one-stop partner for investors across mutual funds, PMS, AIFs and International offerings. Thank you for your time today, and wish you Happy Makar Sankranti.
Operator
[Operator Closing Remarks]