Nippon Life India Asset Management Ltd (NSE: NAM-INDIA) Q2 2025 Earnings Call dated Oct. 24, 2024
Corporate Participants:
Sundeep Sikka — Executive Director & Chief Executive Officer
Arpanarghya Saha — Chief Digital Officer
Saugata Chatterjee — Chief Business Officer
Amol Bilagi — Deputy Chief Financial Officer
Parag Joglekar — Chief Financial Officer
Analysts:
Jignesh Shial — Analyst
Unidentified Participant
Lalit Deo — Analyst
Shreya Shivani — Analyst
Prayesh Jain — Analyst
Madhukar Ladha — Analyst
Darshan Shah — Analyst
Santosh Keshri — Analyst
Amit Gupta — Individual Investor
Abhijeet Sakhare — Analyst
Gaurav Jani — Analyst
Bhavin Pande — Analyst
Jatin — Individual Investor
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Nippon Life India Asset Management Q2 FY ’25 Earnings Conference Call hosted by InCred Equities. [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, Steve, and good evening, everyone. On behalf of InCred Equities, I welcome all to Nippon Life India Asset Management Q2 FY ’25 earnings conference call. We have along with us Mr. Sundeep Sikka, Executive Director and CEO; Mr. Parag Joglekar, the Chief Financial Officer and the senior management team of Nippon Life India Asset Management. We are thankful to the management for allowing us this opportunity.
I would now like to hand it over to Mr. Sundeep Sikka, Executive Director and CEO of Nippon Life India Asset Management for his opening remarks. Over to you, sir.
Sundeep Sikka — Executive Director & Chief Executive Officer
Thanks. Good evening, everyone, and welcome to our Q2 FY ’25 earnings conference call. I have with us our CFO, Parag Joglekar, who has recently joined us; Chief business Officer, Saugata Chatterjee; Deputy Chief CFO, Amol Bilagi; Chief Digital Officer, Arpan Saha; Head ETF, Arun Sundaresan; Head AIF, Ashish Chugani; and Matsui-San, Nominee of Nippon Life Japan.
I would like to share some comments on the recent industry trends and our performance prior to addressing your question. I would like to start by mentioning that in Q2 FY ’25 NAM India has achieved its highest ever quarterly profit after tax of INR3.6 billion as well as the highest ever quarterly operating profit of INR3.65 billion. Further, our equity sales, market share and SIP market share remain well above our equity AUM market share.
Beginning with the markets, equity markets in Q2 FY ’25 displayed another strong performance overall. The Nifty moved up by 7.5% quarter-on-quarter, while Nifty Mid-Caps, Mid-Cap and Small Cap indices rose by 7.1% and 7.6% respectively. RBI held the repo rate steady at 6.50%, while the 10 year G-Sec yield moderated by 26 basis points quarter-on-quarter to 6.75%.
Coming to the data on mutual fund industry. Industry quarterly average AUM grew by 12% quarter-on-quarter and 41% year-on-year in Q2 FY ’25 to INR66.2 trillion. Strong momentum in Equity segment sustained as the share of Equity in overall AUM continued to increase, ending at 60.9% for Q2 FY ’25, up from 53.5% in Q2 FY ’24.
Now moving to the industry flows. The Equity category, excluding index and arbitrage, witnessed a gross inflow of INR2.78 trillion and a net inflow of INR1.32 trillion. Both gross and net inflows were higher on quarter-on-quarter basis for the fifth successive quarter. Categories with the highest inflows were Sectoral, Thematic, Multi Cap and Multi Asset Allocation funds.
Moving on to SIP. Investments via SIP route further increased with the SIP contribution for the quarter being INR714 billion, up 52% year-on-year and 14% quarter-on-quarter. Monthly SIP flows in September ’24 stood at INR245 billion, which was another all-time high. The Fixed Income category, that is debt and liquid, witnessed a net inflow of INR507 billion, which was lower on a quarter-on-quarter basis. The ETF category had a net inflow of INR204 billion. At the end of the quarter, unique investors in mutual fund industry increased to 50.1 million, that is an increase of 24% year-on-year.
Now moving to our business performance. We moved — we closed the quarter with total assets under management of INR6.54 trillion. This includes Mutual Funds, Managed Accounts and Offshore Funds. Our Mutual Funds quarterly average AUM grew 14% quarter-on-quarter and 57% year-on-year to reach INR5.49 trillion. This made us the fastest growing AMC amongst the top five over a period of six months, one year and three years’ timeframe. We also had the highest increase in quarterly AUM market share on a year-on-year basis amongst all AMC’s.
Now I would like to share a few key highlights for the quarter. Starting with the market share, our market share increased 9 basis points quarter-on-quarter and 83 basis points year-on-year to 8.29 with the market share increases across most asset categories. This is the sixth consecutive quarter of market share increase that we have witnessed. Our Equity market share also continues to improve. It increased by 8 basis points quarter-on-quarter and 43 basis point year-on-year to 6.96. This is the highest Equity market share post December 2020.
The share of Equity AUM in our overall AUM continues to increase and stood at 51.1% for Q2 FY ’25, up from 49.8% as of Q1 FY ’25. We achieved a high-single-digit market share in net sales in Equity plus Hybrid categories in Q2 FY ’25. However, excluding NFOs, our market share would be in double-digits. We continue to have the largest base in the mutual fund — investor base in the mutual fund industry with 18.9 million unique investors. We are humbled to have over one in three mutual fund investors in India who invest with us.
I would like to touch upon some important aspects of our systematic book. I’m happy to share that there has been a continued uptick in our systematic flows over the last 13 quarters, which has led to an increase in market share. The SIP market share increased by 52 basis points to 9.88% over June 2024 to September 2024. This also represents an increase of 385 basis points over March ’23 when our SIP market share was 6%. Our monthly systematic book rose by 22% quarter-on-quarter and 81% year-on-year to INR31.4 billion for September 2024. This resulted in an annualized systematic book of INR376 billion.
I would now like to update you on an increase in headcount witnessed in the quarter. Our employee headcount increased by 85 employees in Q2 FY ’25. As stated in the previous call, we have inducted 55 management trainees from premier institutes in July ’24. As AI remains an important focus area for us, we have also added resources on this front. We will continue to invest in future growth, including talent, technology and other areas.
Now moving briefly to ETF segment. We continue to be one of the largest ETF players with an AUM of INR1.48 trillion and a market share of 18.2%, which increased by 37 basis points quarter-on-quarter and 414 basis points year-on-year. Our share in industry ETF folios is 57%. We are 56% of ETF volumes on BSE and NSE. Our ETF’s average daily volumes across key funds remain far higher than the rest of the industry. Further, our gold ETF is now the 11th largest asset gold fund globally. To further strengthen our passive offerings, we launched two new products in Index Fund category during this quarter, namely Nippon India Nifty 500 Equal Weight Index Fund and Nippon India Nifty 500 Momentum 50 Index Fund.
Moving to our digital franchise, digital purchase contribution rose to INR3.97 billion in Q2 FY ’25, up 160% year-on-year. Digital business contributed 70% of our total new purchase transaction in Q2 FY ’25. ONDC is one of the major initiatives taken by Government of India towards financial inclusion. Nippon India Mutual Fund was the part of the first ever mutual fund transaction on ONDC platform that happened at the Global Fintech Conference in August 2024.
Now I would like to briefly update you on our subsidiaries, namely AIF and Singapore operations. Starting off with our AIF, under Nippon India AIF, we offer Cat II and Cat III AIFs and have total commitments of INR67.7 billion across various schemes. Fundraising is currently underway for our Listed Equity AIF, Performing Credit AIF and Direct Venture Funds. During the quarter, we have undertaken closing of one of our real estate credit AIFs, a follow-up fund to the existing real estate mandate from Japanese investors.
On the offshore front, we have witnessed good equity inflows in the quarter from various international geographies. Offshore AUM grew by 56% year-on-year to INR152 billion. Our UCITS Equity Fund has crossed an AUM of USD500 million and we continue to square [Phonetic] new and niche offerings in the Indian equity space for international investors.
Now on to our financial performance. For Q2 FY ’25, revenue stood at INR5.71 billion, up 44% year-on-year and 13% quarter-on-quarter. Other income stood at INR1.21 billion, up 55% year-on-year and down 8% quarter-on-quarter. Operating profit stood at INR3.65 billion, up 57% year-on-year and 19% quarter-on-quarter. Profit after tax stood at INR3.6 billion, up 47% year-on-year and 8% quarter-on-quarter.
The tax component in the quarter includes a one-off impact owing to the change in the tax regime post the budget, that is, removal of indexation benefit on debt funds invested prior to March 31, 2023 and increase in short-term and long-term capital gain on equity mutual funds. For H1 FY ’25, operating profit grew by 58% year-on-year. Profit after tax grew by 44% year-on-year. Further, the board of directors have declared an interim dividend of INR8 per share along with the Q2 FY ’25 results.
To conclude, I would like to again mention, we have been the fastest growing AMC over six months, one year, three years and we will endeavor to grow our journey of profitable growth going forward as well.
With this, I would like to conclude the remarks and open the floor for questions.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of [Indecipherable] from Thinqwise Wealth. Please go ahead.
Unidentified Participant
Hello, can you hear me?
Sundeep Sikka
Yeah, please go ahead.
Unidentified Participant
Yeah. So you mentioned that ONDC you had a first transaction. So I just wanted to understand how is ONDC helping you and the industry at large basically? And if you could just speak about ONDC in general? I just wanted to understand that one thing. Thank you.
Sundeep Sikka
Sure. I’ll request my colleague, Arpan, to give some inputs on this. I would just like to give an initial comment. ONDC is Government of India’s largest initiative, equivalent to or bigger than UPI, and it will help a lot for financial inclusion in India. I think our transaction is in spirit of continuous innovation that we plan to do and launch new products and try to keep exploring new avenues to reach small investors in small cities and towns.
In line with that, I think I’ll request, Arpan, if he wants to add anything else.
Arpanarghya Saha
Thank you, Sundeep, and thank you for the question. So the open network for digital commerce is, as Sundeep mentioned, an initiated by the Government of India. The objective is to democratize digital prowess to reach out to the numerous sellers and buyers across the last milestone in this country. Also the part of our digital strategy, we believe that in order to have inclusion of new customers for the mutual fund industry, it’s important to go beyond BFSI partnerships and touch upon the retail space where people are still not etched on the mutual fund industry and we believe that ONDC would be a great platform which will gain a lot of momentum in the years to come.
And each and every Indian customer would be able to invest in the Nippon India Mutual Fund along with the rest of the asset management industry, especially the huge base of B2C customers in Tier 3, 4 locations at the pin codes where Internet has penetrated. But because of people’s saving skills, mutual fund is just starting to gather momentum. This is the right time to do that. And Nippon, in fact, was the first asset management company to partner and get an opportunity with ONDC to start the mutual fund business on this platform for the consumers. Thank you.
Unidentified Participant
Thank you, sir, for that detailed answer. Sir, just one follow-up on that. So are we like paying ONDC for some kind of a data analysis on that sense for those cities where we cannot have reach? Just wanted to understand.
Arpanarghya Saha
So we are not in any kind of payment structure because we believe that both ONDC and Nippon have the same vision of inclusivity for the digital commerce space, and therefore, it is important that we jointly get customers to the mutual fund forum. So I think that’s the overall vision that we have jointly concluded for.
Unidentified Participant
Got it. Thank you. That’s it from my end.
Arpanarghya Saha
Thanks very much.
Operator
The next question is from the line of Lalit Deo from Equirus Securities. Please go ahead.
Lalit Deo
Good evening, sir. Congratulations on a good quarter. Sir, just two questions. Firstly, on the SIP flows. So we have gained about more than 50 basis points of market share on a sequential basis. Sir, just wanted to understand, like which of the categories we are seeing a huge improvement in the SIP flow? And also you can talk — could you talk about the different channels where we have been gaining market share?
Sundeep Sikka
So Lalit, I’ll request my colleague, Saugata Chatterjee, to answer this question.
Saugata Chatterjee
Yeah. Thanks, Lalit, for this question. Yeah, so SIP for us, like we have been mentioning in the previous calls, it’s a very, very important part of our strategy. And when we are trying to acquire these SIPs from the various parts of India, we use multiple channels. For us, digital is a big channel. We also use the feet on street model where our mutual fund distributors, the banks and the various stock broking arms, they are all onboard, they have all onboarded our funds and through the retail channels we acquire these SIPs in the market.
The good part is, we have a very strong franchise of beyond 30 channels who are participating in our SIP growth. So it’s a cumulative effort of digital, non-digital, phygital efforts which we are putting on the ground to increase the SIP book. We also do a lot of digital marketing activities using our — all our existing client base to enhance the SIP book as well as to ensure that multiple products are acquired through the digital channel. That’s the way we are increasing our SIP book.
Lalit Deo
Sure, sir. Thank you. And sir, shifting on the yield side. So our catalyst is that that revenue we use have broadly been remained stable on a quarter-on-quarter basis in the standalone business, but despite the strong growth in the overall AUM. So could you give us the segment wise yields? Like have you seen any pressure on the — across different segments?
Amol Bilagi
Yeah, hi. Amol here. So on the yield side, because of telescopic pricing, as the AUM grows, I think the pressure on the yield would continue as we have been maintaining this — saying over the calls. So for the current quarter, the yield stood at around 37 basis points, a drop of around 0.5 basis points quarter-on-quarter. As far as asset class wise is concerned, the yield on the equity stood at around 58 basis point, on debt it stood at around 25 basis point, on liquid around 12 basis points and on ETF around 15 basis point.
Lalit Deo
Sure. And sir, like just another thing was like one of our competitive peer has probably cut distribution — has cut yield on the bank book of the distributors. So going ahead, do we see any similar kind of a reaction from our side just to protect our revenue yield?
Amol Bilagi
Lalit, I think as a process, we continue, always keep evaluating wherever there’s an opportunity. As I mentioned in my closing remark, I think we will continue focusing on profitable growth as a part of that. We have it in past also, we looked at our brokerages and we will continue doing that irrespective of what the competition does or not do. I think we’ll continue — our focus remains, while we have seen a lot of increase in market share, but between market share, top-line and bottom-line, our focus will always remain on bottom-line.
Lalit Deo
Sure, sir. That would be my questions. Thank you, sir.
Operator
The next question is from the line of Shreya Shivani from CLSA. Please go ahead.
Shreya Shivani
Hi. Thank you for the opportunity. Sir, just wanted to check on the tax bid that has come in. So whatever was the excess that we would have incurred because of the change from margin receding now, we’ve still taken all of it in 2Q and we should not expect anything higher than this coming up in the coming quarters. I’m just asking because this tax rate was a big question mark for this quarter and your tax rate and what probably your peer has reported is very different. And I understand the mix is very different and so many things could be different for the calculation of it, but just wanted a clarification on that.
Second, I wanted to check that on the employee addition, you’ve mentioned 55 management trainees will join in July. And have you also mentioned about 45 new employees addition in this financial year? So is it like there are 90 people added in FY ’25? This is my second question.
And my third question is just something that I was wondering that on your Small and Mid-Cap Fund, so I understand that if I take Nippon Small and Mid-Cap Fund as a market share of the total small and mid-cap industry, it dipped a little back to about 13% or so. Do we internally keep any market share limits over here or any market share limits in the non — in the other large cap, etc.? Because there you’ve significantly gained market share in the X small and mid-cap equity portfolio. So do we internally keep any limits, any ranges that we want to be in? Those are my three questions.
Sundeep Sikka
Yeah. Thanks, Shreya, for the question. So I would take the tax part of it and then probably other colleagues can take another part. So the tax fund, see how we go about when we provide for tax is on the yearly basis, what is the effective tax rate that we foresee that is going to happen. So on that basis, what we foresee is the tax rate for the year is — as of now, the tax forecast is 25.7% of roughly 26%. And that is what you will see in the half yearly results tax base, if you look at it. So that is how we project as mentioned. So we have taken the full impact of the changing the tax rate and the indexation benefit that is [Indecipherable]. We have taken the full impact of that in this quarter.
Saugata Chatterjee
So I think on the other two questions of the employees, I think we have added 130 employees in H1, 45 were added in Q1 and 85 have added in Q2. I think we broadly feel for this financial year. We broadly have been — this number will not go up maybe by about another 10-odd, 10, 15, but we have finished our recruitment for this year. That is part number one of the employees.
Coming to the other question on the small cap and market share, I think we do not like to approach it from a market share of a segment point of view. I think from our own, focus is very simple that I think will continue. Every fund, every category is important for us. We will ensure that we continue to deliver superior returns and let the investor decide where he wants to come.
I think they have to put individual market share targets in a subcategory. I think we feel that is not the very customer-centric approach. Let customers take the decision whether he wants to come based on this appetite. From our perspective, overall, as a portfolio, every fund is equally important. So we should know [Indecipherable] it’s not small capital more important than others. And as we have mentioned in past, the inflows for us, even after we put a cap on small cap; inflows, we are seeing across the various funds. So, I think — I hope this answers your question.
Shreya Shivani
Yeah. That’s useful. One more question, if I can add is on your managed account, that book — okay, I’m not very sure of this, but that includes your AIF business, right? The INR825 billion?
Sundeep Sikka
Yeah. Yeah, that includes…
Shreya Shivani
Yeah. So I was just trying to understand that book has been largely flat between June and September. So, any color around that? What has happened and some color on that would be useful.
Sundeep Sikka
So, broadly, I think you’re right. I think it’s broadly been flat. There has been some fundraise, but there’s also some maturities, you know some funds which have matured, I think, and they have seen an outflow. From our perspective, I think as I’d mentioned earlier, we are currently underway in our fundraise for our listed equity performing credit and a direct venture fund, which is Internship [Phonetic] and Technology Fund.
So as you can understand, unlike mutual funds, many of these things are — some of these are also funds where they’ve taken at a time and they are more binary unit-linked. So, it’s not like a ship which is ticking in every day. So I think we believe we are building up a strong foundation. And even maybe in the next quarter or two also, you might see it relatively flat because it will take a little time. But I think all I can say is this is going to be an important business for us.
Shreya Shivani
Got it. So should I interpret it as it is an account where the inflow/outflow can be chunky. That bit is correct, right? If there money can come in huge amounts and then exit in huge amounts, right?
Sundeep Sikka
So, I think, again, I think there are two parts to it. I mean, definitely, but when you look at the offshore mandates and all, they are chunky, and they are chunky, you know, so what happens is many times, you will see one mandate [Phonetic] going out. But I want to also clarify, I think what you’ve seen in the managed account, a very large part of the managed account [Phonetic] is also the PLI, the Postal Life Insurance mandate that we manage. So, that also has a reflection of mark-to-market outflows and inflows.
But your bigger question on, I think, what I want to touch is that AIF remains very critical for us, a lot of things. In fact, when I talked about the equipment also head count, as specifically mentioned, we are adding a lot more senior resources in our AIF business. And I think we’re building a strong foundation for future.
Shreya Shivani
Got it. This is very useful. Thank you so much and all the best.
Operator
Thank you. [Operator Instructions] The next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead.
Prayesh Jain
Yeah. Hi. Good evening, everyone. Firstly, I just wanted to understand the behavior of the customers, especially coming in from the digital players like Groww, Angel One and those kind of digital customers. Is it that a lion’s share comes to the top three schemes, top ranked scheme in the category and the lower schemes get a much lower share. So basically, trying to understand whether the quartile — importance of quartiles is kind of receding and the top three rank is kind of holding up better? That would be my first question.
Sundeep Sikka
So, I think I would not like to go with a customers of a particular channel, coming through ABC distribution or which digital partner. But I think broadly, what we have seen is digital, I think, investors which are coming through digital are also in offline. They can be divided in two different categories. There are investors who are, especially some of the first time investors for whom the returns become a very, very important thing. I mean they look at the — only the returns.
But I think what we have seen as investors mature and they try to see a longer track record of the companies, which have been — how they have performed over different market cycles. And no two investors are the same. So I think these are the investors, I think there will be investors who like to see funds, which have a track record of 20 years. I think for them, the — some investors, that could be a very important thing.
For some investors, performance of the last quarter, forget one year, could also be important. So there’s no single trend that we can figure out from digital channels. But I think one thing that you will see that works, whether it is digital or offline, funds having a long-term track record and have performed through different market cycle, they tend to get away with the lion’s share, irrespective in one or two quarters, you can see a little bit of slip here or there. But consistency over a long period of time is what have been just rewarded.
Prayesh Jain
Got that. Secondly, on the international fundraising and international, what are the recent developments? And what are the things that you guys have planned for the next couple of years?
Sundeep Sikka
So, I think — so we are at this point of time, but there are two parts to it. I’ll break it down, Japan and ex-Japan. So, I think on a regular day-to-day basis, I think we — because of our usage structure, and we have come some advisory bandits globally, which keeps happening. But I think we’ve also seen a lot of interest in — from Japan. We are, at this point of time, I think while I won’t be able to give specifics. But over the next six to nine months, you will see a couple of new funds, India dedicated funds getting launched in Japan, which will be managed by us.
Prayesh Jain
And ex-Japan?
Sundeep Sikka
In next six to nine months.
Prayesh Jain
So you said a couple of schemes in Japan in the next six to nine months, right?
Sundeep Sikka
Yes, yes.
Prayesh Jain
And what about ex-Japan?
Sundeep Sikka
Ex Japan, I think we continue — I think because of the Japan is a home country, I think we’re very strong here. But other than that, also there are a couple of — I think we have seen money — we are a sovereign — our Middle Eastern sovereign wealth fund that we’re managing. We are seeing flow coming from Europe also. But I think it is — that is in line with what we’ve seen the flow coming. But in Japan, we have a distinct advantage being the home country for us. I think we are very bullish about that.
Prayesh Jain
Okay. And last question is on the commission structure. You mentioned that you make corrective actions here and there. But is it a trend that you — basically to protect the further fall in EE [Phonetic] from here on, with respect to the growth in AUM, would you want to kind of link to the commission structure to the TERs and — rather protect your yield as well by not passing on — by passing on the hit of the TER to the distributors. Is that a thought that we are working with so that our yields kind of get protected in further falling TERs because of the periscopic structure?
Sundeep Sikka
I think I won’t get into the nitty gritty, but I think my sense is you will see industry moving towards that.
Prayesh Jain
Okay. Okay. Got it. Thank you so much and all the best.
Operator
Thank you. The next question is from the line of Madhukar Ladha from Nuvama Wealth Management. Please go ahead.
Madhukar Ladha
Good evening. Congratulations on a great set of numbers. So, just a couple of questions from my side. I don’t know whether you’ve already addressed this because I missed a little bit of the call.
First, is there some reduction in Q-o-Q equity yields? And just wanted to get a sense of — what is driving that? And if you could also give your segment-wise yield, that would be useful.
Second, what is driving such a strong other income? And third, even if I adjust your tax amount by the INR29.5 crores of that deferred tax liability, our tax rate for the quarter is still quite low. So what is happening there? If you could help us with that.
Sundeep Sikka
So, Madhukar, I think I’ll request Parag and Amol to take this question.
Parag Joglekar
So, Madhukar, I think, Amol covered the realization which we have. So, there is a slight drop because due to this telescopic pricing in equity, it has dropped to — from INR59 crore-odd up to INR58 crore-around. And so that is there. So, as telescopic pricing, there will be some movement in the yields will happen on equity. Debt remained in the range of around 24, 25 basis and liquid remain in the range of around 12 basis.
Madhukar Ladha
Got it.
Amol Bilagi
Yeah. On the other income front, Madhukar, I think it is more due to mark-to-market than nothing. Anything, it’s one-off or something like that. It is clearly mark-to-market. It is on the investment that we have in the mutual fund equity and debt scheme. So there is nothing,
Madhukar Ladha
That’s why the tax rate is low because…
Amol Bilagi
Yeah, tax rate definitely because the higher the other income, it would have a positive impact on our tax rate.
Madhukar Ladha
Yeah, sure. Got it. Okay, thanks. Thank you.
Sundeep Sikka
Thanks.
Operator
Thank you. The next question is from the line of Darshan Shah from Multi-Act Equity. Please go ahead.
Darshan Shah
Yeah. Thanks for the opportunity. My question is on the commission rationalization part. So, on what percentage of AUM have you rationalized the commission? And have we seen the full impact in this quarter?
Saugata Chatterjee
Yes. Hi, Darshan. This is Saugata this is. So commission rationalization, like we have mentioned in our earlier calls. So we had done, in our small cap fund, which was the largest fund of ours, we had done the entire — on the entire book, the function rationalization was done, which continues to fall in place because we have now set up a system where as per the TR movement, the commercials keep going down, in case of small cap fund.
This similar logic has been applied to all the new businesses which come in all the funds. So depending on the telescopic pricing drop or the telescopic method of drop in TR, the new brokerage structure on the new flows continues to move in that direction. So, we are technically — actually, it is a pass-through what is happening at this point in time.
Darshan Shah
But there is no change in the back book commission side, except for the small cap fund?
Saugata Chatterjee
On the entire book, of course, it was the small cap fund and we are evaluating. As we progress, we will definitely keep assessing opportunities to look at the entire book on several funds.
Darshan Shah
Okay, thank you.
Operator
Thank you. The next question is from the line of Santosh Keshri from SKK Huf. Please go ahead.
Santosh Keshri
Hi, am I audible?
Sundeep Sikka
Yeah. Yeah, please go ahead.
Santosh Keshri
Okay. Thank you so much for giving me an opportunity. Actually, a few queries from the financials. Like, I can see that our revenue quarter-on-quarter went up by 13%, whereas the PBT was up only by 10.78%. Now in this kind of business, where the operating metrics is more in favor of the business, it should not — it should be more than the percentage of revenue that really it went up by. So may I know the reason? Is it because of ESOP cost?
Amol Bilagi
So if you look at it, you’re right, the revenue from operation has gone over 13%, but the other income is down 8%. So that is also having an impact on the PBT level. So that’s why the PBT is up by only 11%.
Santosh Keshri
Okay. And what is the impact of ESOP cost in this quarter? And how long it will continue, if you can just give full numbers?
Amol Bilagi
So, the ESOP cost for the quarter, it would be around INR11 crores, INR12 crores. INR12 crores. INR11 crores or INR12 crores for this — INR11 crores, sorry, for this quarter. And for this year, as we have maintained that for this year, the ESOP hit on account of the new ESOP granted would be around in the range of INR42 crores to INR45 crores.
Santosh Keshri
Okay. Okay, and second thing is, from the business point of view, I guess we haven’t launched any new ETF or new fund for — new fund for subscription by the investors. But even then we can see that the fees and commission line is going up. like they have seen an increase of almost 7% quarter-on-quarter and 23% year-on-year. So what’s the reason that the fee and commission will go up while we are not launching any new fund?
Sundeep Sikka
So, Santosh, this is not only for the mutual fund, it is on the AIF side. That is why there is a slight increase on the fee and commission. [Indecipherable] consolidated basis.
Parag Joglekar
Yes, no mutual fund.
Sundeep Sikka
Yes.
Santosh Keshri
Okay, okay. And any reason, sir, we are not launching new funds because our competition is launching new funds and they are collecting money in buckets. And most of the subscriptions are hugely successful. Lot of funds are coming in and their profits are also — even though they are quite large, their profits are much more appreciating, quarter-on-quarter increment is much more than us. So, any reason we’re averse to launching new funds?
Sundeep Sikka
So, Santosh, I think, as we have mentioned in past, I think we will not like to launch multiple NFOs. We like to focus scaling up our existing schemes and — whenever we have good performance, continue creating wealth for investors and scale it up. We do not believe in launching NFOs, which is more asset gathering strategies.
From our point of view, the two principles guide us. Number one is, to create wealth for investor, we focus on the existing schemes. And for the shareholders, focusing on profitable growth. So we do not want to be distracted by short-term increase in AEMs, which comes with MFS [Phonetic], which may or may not be sticky or sustainable from an outcome point of view.
Santosh Keshri
Okay. So that’s the biggest call we have taken.
Parag Joglekar
And also, Santosh — okay.
Santosh Keshri
Yeah. You were saying something, sorry.
Parag Joglekar
Just, a reference point should be that our net sales growth is very consistent over the last one year, month-on-month. So we don’t get impacted by these NFOs, because there’s a lot of churn money which keeps coming in NFOs. We are looking at fresh flows, which keeps giving us growth.
Sundeep Sikka
What you can see is basically our checkbook has almost doubled, and the market share has doubled in last three, four years. And we believe it is slow growth, but consistent and stable growth.
Santosh Keshri
Okay, thank you so much. Have a good time. Bye.
Operator
Thank you. The next question is from the line of Amit Gupta [Phonetic], an Individual Investor. Please go ahead.
Amit Gupta
Yeah. Hello, am I audible?
Sundeep Sikka
Please go ahead Amit.
Amit Gupta
Yeah. Thank you for the opportunity. My question is, I think most of the questions have been answered. But one question which I’ve been looking to ask is, like we are the leading player in the ETF and ETF segment. But we are not launching any innovative products like Triple ETF, triple leverage ETF, which are like in U.S.? Are we not allowed to do — launch such ETFs in India? Or we have not pushed those two — ready to introduce such ETFs India.
Sundeep Sikka
Mr. Amit, I think broadly, I think we continue, like we had mentioned in the opening address, we launched two new products this time in this quarter, which was Nippon India Nifty 500 Equal Weight and Nippon India 500 momentum, 50 Index Fund. I think and some of these are industry first.
We continue evaluating various products. Some of the products that you mentioned right now — some are not allowed by the regulator. And some also, we believe many — I think we had a very strong view, I mean, in line with the earlier question, which was asked, we like to launch products which are simple and easy for investors to understand. We do not want to get into complex products, which basically it’s difficult for investors to understand.
And while in short term, they look very exciting. But from a long-term point of view, they may or may not be good for the investor. But we’ll continue evaluating. I would also like to share with you our ETFs and passive product suite is one of the largest in the industry. And so — and which is also gets reflected in the number of investors and the total market share we have.
Amit Gupta
Right. Thank you. Thank you. And all the best.
Operator
The next question is from the line of Abhijeet Sakhare from Kotak Securities. Please go ahead.
Abhijeet Sakhare
Hi, good evening, everyone. I just have a one number question. What would be your realizations or yields in the pension in the offshore business?
Parag Joglekar
So, generally, we don’t give out that numbers. So it would be in the range actually this is on the — on the government, it will be on a lower side. But on AIF and other businesses, it would be in the range of 0.5 to 1.5 basis percent.
Abhijeet Sakhare
Got it. And just one more, if you can share any outlook on expense growth for the next six to 12 months? Thank you.
Parag Joglekar
So, Abhijeet, the expense growth we are looking at ex of ESOP should be in the range of around 15%-odd. That should be the outlook we are looking at.
Abhijeet Sakhare
Got it. Thank you so much.
Operator
Thank you. The next question is from the line of Gaurav Jani from Prabhudas Lilladher. Please go ahead.
Gaurav Jani
Thank you. And congrats on a good quarter. So two questions from my side. One is, a slightly broader question. I mean, also according to the industry, I mean, not only you guys, but in the last two-odd years, we have seen elevated commissions and elevated sales, which is sort of normalizing right across some of the MCs. Could this trend continue for 1.5 years or how should we look at it? That’s number one.
And secondly, what would be the impact on net sales overall for the industry and especially for the players that are doing well? Thanks.
Sundeep Sikka
If I was to, I think this will be very difficult to answer it for the industry. But I think one thing is very clear. I think if you were to see like in any industry, there will be different players depending on what they show the Board and the shareholder guide, whether you want to work for top line or bottom line. I think what you’re seeing is basically — I mean there will be industry players who will continue pay higher commissions for whom the market share is more important. And over multiple quarters, and including my address earlier, I mentioned, as a company, we will focus on growth, but it will be profitable growth. While I think we have seen market share go up, but if ever, it’s a question between market — top line and bottom line, it will be the bottom line that will guide us. So for us, that will be the guiding principle.
Gaurav Jani
So, simply, what I understand is certain amount of flows can be compromised?
Sundeep Sikka
If they’re — if incremental, they do not add to the profitability, yes, we will.
Gaurav Jani
Thank you so much. That’s it.
Operator
Thank you. The next question is from the line of Bhavin Pande from Athena Investments. Please go ahead.
Bhavin Pande
Hey, hi. Congratulations on a great set of numbers. I just had one question regarding the filing that we had done last month in which we spoke about investments made by erstwhile promoters. So has there been any measurable progress on that front?
Sundeep Sikka
I think we continue working with the regulator. There’s no new update. I think the last update, which has been informed to the stock exchanges, there’s no further update after that. And if there is any, I think, we’ll keep you informed.
Bhavin Pande
Great sir. Congratulations. Thank you.
Operator
Thank you. The next question is from the line of Jatin [Phonetic], an Individual Investor. Please go ahead.
Jatin
Yeah, good evening. My question is like whether Nippon India Mutual Fund will look to expand in other verticals like health insurance or life insurance in near future?
Sundeep Sikka
So, Jatin, as mentioned earlier, I think our focus remain on profitable growth within the regulatory framework that we can do. As per Section 24, I think we can only continue focusing on asset management businesses. So we will continue focusing and expanding our businesses and continuously evaluate both growing organically and acquiring any business that is related to asset management. And as and when there is anything — further updates, we’ll continue — we’ll continue being in touch with you.
Jatin
Thank you.
Operator
Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for their closing comments.
Sundeep Sikka
So, thank you very much. I think and as mentioned earlier, the management team will continue focusing on profitable growth. Thank you very much, and wishing all of you very happy Diwali.
Operator
[Operator Closing Remarks]