Nippon Life India Asset Management Ltd (NSE: NAM-INDIA) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Unidentified Speaker
Sundeep Sikka — Executive Director & Chief Executive Officer
Parag Joglekar — Chief Financial Officer
Analysts:
Meghna Luthra — Analyst
Lalit Mohan Deo — Analyst
Prayesh Jain — Analyst
Mohit Mangal — Analyst
Ankit Bihani — Analyst
Rahul Kumar — Analyst
Abhijeet Sakhare — Analyst
Gaurav Jani — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Nippon Life India Asset Management Limited Q3FY26 earnings conference call hosted by Incred Equities. As a reminder, all participant lines will win the Listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Meghna Luthra from Incred Equities. Thank you. And over to you Ma’a m.
Meghna Luthra — Analyst
Thank you IKRA and good evening to everyone. On behalf of Incred Equities, I welcome you all to Nippon Life India Asset Management third quarter FY26 earnings conference call. We have along with us Mr. Sandeep, executive director and CEO. We are thankful to the management for allowing us this opportunity. I would now like to hand it over to Mr. Sandeep sir for his opening remarks. Over to you Sir.
Sundeep Sikka — Executive Director & Chief Executive Officer
Thanks a lot. Good evening and welcome to our Q3FY26 earnings conference call. We have with us our CFO Parag CBO Sugata Chetty, New SAT Class Head Andrew Holland, Deputy CFO Amol Bagli, CDO Arpan SAAB Head ETF Arun Sundaresan and Deputy Head AIF Ashwin Dugal and Matsui San, nominee of Nepal Life Japan. I would like to share key highlights of our performance and post that I will hand over to Parag to speak in greater detail on the recent industry trends as well as our performance post which we will move to Q and A. Coming to the key highlights, I would like to start by mentioning that during this quarter NAM India crossed the milestone of INR 8 trillion of total AUM and INR 7 trillion of mutual fund AUM.
Further, NAM India achieved its highest ever quarterly operating profit at INR 4.58 billion as well as profit after tax of INR 4.04 billion. NAM India is also the fastest growing AMC in the top 10AMCs in Q3 FY26 as well as 9 months FY26. This led to a continued increase in our overall AEM market share. We had the highest increase in AEM share in the industry in Q3 FY26 and 9 months FY26. Our market share at 8.65% is our highest since 2019. More importantly, both equity sales market share and SIP market share remained well above our equity AUM market share with both being in high single digit for the quarter.
Lastly, on our AIF subsidiary. Our Board of Directors in their meeting on November 13, 2025 authorized the company to enter into a strategic collaboration with DWS Group, a leading European asset management company wherein DWS intends to acquire a minority stake up to 40% in Nippon Life India Asset Management Limited by subscribing to fresh issuance of equity shares. Further, as part of wider collaboration, NAM India and DWS will also work closely in other areas including passive investment, products and global distribution. Now I will hand over the call to Parag for further details on industry trends and our performance.
Parag Joglekar — Chief Financial Officer
Good evening. Thanks Andeep. Let me start with the markets equity market in Q3FY26 witnessed a pickup from prior quarter levels. The Nifty increased by 6.2% quarter on quarter. The nifty Mid cap index increased by 5.9% quarter on quarter while the nifty small cap index was flat quarter on quarter. The repo rate decreased by 25 basis to 5.25% while the 10 year GSAQ yield increased by 1 basis quarter on quarter to 6.59%. Coming to data on the mutual fund industry industry quarterly average AEM grew by 18% YoY and 5% quarter on quarter in Q3FY26 to INR 81 trillion.
The share of equity in overall AEM increased marginally quarter on quarter ending at 57% for Q3 FY26. Now moving to industry flows, the equity category excluding index and arbitrage witnessed a gross inflows of INR 2.54 trillion and net inflows of INR 1.11 trillion. Both gross inflows and net inflows were lower quarter on quarter categories with the highest inflows were Flexicap, Multi Asset Allocation and Mid Cap funds. The fixed income category I.e. debt and liquid witnessed a net inflow of INR 17 billion in the quarter after a net inflow in the prior quarter. The ETF category had a net inflow of INR 522 billion.
Moving on to the SIP industry, SIP contribution from for the quarter was 900 billion up 17% year on year and 5% quarter on quarter. Monthly SIP flows in December 2025 stood at INR 310 billion, an all time high. Further contributing SIP folios increased by 5.4 million, that is 6% higher to 97.9 million for December 2025 over September 2025. At the end of the quarter unique investor mutual fund industry increased to 59 million, that is an increase of 12% year on year now moving to our business performance, we closed the quarter with a total asset under management of INR 8.16 trillion.
This include mutual funds, managed accounts, offshore funds and Gift City. Our mutual fund quarterly Average AEM grew 23% year on year and 7% quarter on quarter to reach INR 7.01 trillion. We were the fastest growing AMC in the top 10 in Q3 FY26 and 9 month FY26 and had the highest increase in quarterly average AUM market share among all AMCs. I would now like to share a few key highlights for the quarter starting with the market share. Our market share increased 35 basis year on year and 14 basis quarter on quarter to 8.65%. Our equity market share increased 11 basis year on year and was stable quarter on quarter at 7.13%.
We achieved a high single digit market share in net sales in the equity and hybrid segment in Q3FY26. However excluding MFO our market share would be in double digit. We continue to have the largest investor base in the mutual fund industry with 22.7 million unique investors. We are humbled to have over one in three investor mutual fund investors invest with us. I would also like to touch upon some important aspect of our systematic book. I am happy to share that there has been a continued momentum in our systematic flows. Our monthly systematic book rose by 12% year on year and 3% quarter on quarter to INR 37.6 billion for December 2025.
This resulted in an annualized systematic book of INR 451 billion. SIP market share stood at 9.82% for December 2025. Moving on briefly to ETF segment, we continue to be one of the largest ETF player with AUM of INR 2.09 trillion and a market share of 20.31% which increased by 220 basis year on year. Our share in the industry ETF folios is 48%. We also have 51% share of ETF foluing on the NSE and BSE. Our ETF’s average daily volume across key funds remained far higher than the rest of the industry. The industry continued to witness a surge in gold and silver ETF volumes in the quarter.
Combined AEM in these two ETFs for NIF for the Nippon Mutual Fund was INR 688 billion as of December 2025 up 54% quarter on quarter. Subsequently the combined AUM in these two funds has crossed INR 1 trillion in January 2026 our gold ETF was amongst the top 15 globally in terms of inflow in 2025. Moving on to our digital franchise Digital purchase transaction and USIP Registration rose to 4.32 million in Q3 FY26 up 6% year on year. We had our highest ever monthly transaction in December 2025 at 1.56 million. Digital business contributed 77% of the total new purchase transaction.
Q3FY26 Lippon Mutual Fund Unified Digital Ecosystem continues to serve a multitude of digital native investors meeting their ever growing needs by providing best in class digital experience across their preferred touch points. Now I would like to briefly update you on our subsidiaries and Gibbs City starting off with AIF. Under Nippon India AIF we offer category 2 and category 3 AIFs and have raised cumulative commitments of INR 89.2 billion across various schemes up 28% year on year. In Q3FY26 we raised INR 2 billion on commitment across various asset class. Fundraising is currently underway for two of our listed equity AIF1 Private Credit Fund and Direct VC Fund.
We achieved our largest fundraise to date with our maiden private credit fund Nippon India credit opportunity fund that is MIKKO1 which is now fully drawn down and deployed based on the success of the first one. We have now launched the second series Mikko 2 on the offshore fund. AEM grew 7% in nine months FY26 and to INR162 billion with major inflows coming in from various geographies in Asia and Europe. Moving to Gift City as stated previously, we currently have two feeder funds namely Nippon India ETF Nifty 50B’s Gift and Nippon India Large Cap Fund Gift the EMF.
These two funds grew 35% quarter on quarter to USD 41 million. Now on to our financial performance. For Q3FY26. Revenue stood at INR 7.05 billion up 20% year on year and 7% quarter on quarter. Other income stood at INR 0.75% 75 billion up 3.9 times year on year and 1 times quarter on quarter. Operating expenses stood at INR 2.48 billion up 17% year on year and 4% quarter on quarter excluding impact of the new Labor Code. Operating expenses grew 14% year over year and 1% quarter on quarter. Operating profit stood at INR 4.58 billion up 22% year on year and 9% quarter on quarter.
Profit after tax stood at INR 4.04 billion up 37% year on year and 17% quarter on quarter for nine month. FY26 operating profit grew by 20% year on year. Profit after tax grew by 16% year on year. With this I would like to conclude my remarks and open the floor for questions.
Sundeep Sikka — Executive Director & Chief Executive Officer
I think before we open the floor for questions I just wanted to clarify. I think my opening address I think when I mentioned was the DWS the 40% stake will be taken in the Nippon Life India AIF company. Just wanted to clarify that. Thank you. I think the floor is open for questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue you may press STAR and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Lalit Mohandeo from Equidistant Securities. Please go ahead. Your line is unmuted.
Lalit Mohan Deo
Yeah. Hello. Yes sir, I have two questions. Firstly on this, could you give us the. So we have seen some sharp growth in gold and silver etf. Could you also give us a share in terms of the top line like how much of the revenues do come from that do these two segments? And also one bookkeeping question like could you spell out the segment wise yields in equity debt liquid and ETFs. And lastly we are seeing some moderation in the market share on monthly stipulos. So anything material to read over there?
Sundeep Sikka
Take this question.
Parag Joglekar
Sure. So on the yields part the yields for equity is around 53 per basis. 53%. 53%. So 53 basis debt is 25 basis, ETF uh is 20 basis and overall yield is 37 basis. We don’t specifically give the asset class wise fees and their contribution to revenue but as you rightly said our overall gold and silver pie in the overall AEM has increased so it has impacted the increase in the overall revenue. Also.
Sundeep Sikka
On the point of the sip, market share, market share. So like it was mentioned in the opening speech, there has been a volatility which is there in the, in the equity market. And if one has seen the AMPI. Data. Flows in the equity schemes are now narrowing down to certain categories. There is one category called flexicap which is a very large category in the MF industry, you know, which is where there’s a lot of different things coming in. We are working towards, you know, building our market share in that particular category or any other Alternate category, but else we are, you know, our sip, you know, consistently moving up barring this few evolutions during the course of the quarter.
operator
You want to ask more questions?
Lalit Mohan Deo
No, no, that. That was it. Thank you.
operator
Okay, thank you. Before we take the next question, I reminded to all if you wish to ask a question, please press star and 1. The next question is from the line of prayers. Jain from Motilal Oswari Financial Services. Please go ahead.
Prayesh Jain
Yeah, hi. Congrats on a good set of numbers. Firstly, just, you know, probably a naive question here, but when you gold ETFs and silver ETFs basically purchase, you know what nature of gold and silver in them.
Sundeep Sikka
Is as per SEBI regulation, it is all backed by physical asset class.
Prayesh Jain
And you cannot take any exposure to derivatives on this.
Sundeep Sikka
No, you cannot. No, not only we said it does not allow for any SEBI registered etf.
Prayesh Jain
Okay, okay, got that. Sorry. The other question was on if I look at the cost or you know, and particularly the. The overall cost for us has been quite moderate in this quarter. Happy to see that. But you know, what’s. What, what’s the kind of driving force behind the moderation in other expenses on a sequential basis in this quarter? Was there any one offs in the previous quarter which have not come in this quarter?
Parag Joglekar
No prayer. There is nothing specific. The cost is in more or less line. In even last quarter there are small dip which is there. But there is nothing to read in this.
Sundeep Sikka
Continue with a discretionary spend depending on the market conditions, branding, technology, various things. But I think you cannot. But I would not like you to see it as any directional thing. If it’s come down. I think it’s just, you know, I think it’s in line with our overall planning. Correct?
Prayesh Jain
Yeah. I think you mentioned the guidance of 15% growth in overall expenses that should sustain for next year also.
Sundeep Sikka
Yes, it should.
Prayesh Jain
And structurally, how do you think Passive as a segment. Right. You know, and it’s been growing very strongly. Right. So from a contribution of profit perspective or some understanding as to, you know, given the scale that you Nippon AMC has on, on the passive side, which is, you know, not linked to epfo, you there’s a massive size out there, right? Some understanding as to what is the contribution that comes into the profit. Like you mentioned the yields on the ETFs. But you know, what’s the kind of cost against it or how do we kind of size the profitability against this, this category.
And that’s been growing at a very fast pace.
Sundeep Sikka
So I think if you break it in two parts. I think your question one is the profitability and how do you see from future point of view? I think from our point of view the way we see is, I think in the Indian context, you know, both active and passive will continue to grow at a very strong pace. You know, and these are totally two different verticals. I mean it is not one is cannibalizing the other. These are two different set of investors who are, you know, I mean there are investors who would like to go for passive, there are investors who like to go for active.
I think yes, we are in a very strong and a dominant position where both as far as active and passive, I think we have a very strong track, long track record and also trusted by millions of investors. I want to also give you another. Way to look at this specifically for the ETF business. Unlike mutual fund business, ETF business globally, the top two, three players always have the lion’s share. Because I mean unlike a mutual fund where an investor typically likes to diversify in two, three different schemes, here the underline is the same and typically for us because we have, as we talk today, more than 56 lakh investors. More investors means more liquidity, more trading and it’s a chicken and egg. And that’s exactly the reason, I think if you see you talked about gold and ETF earlier, someone asked this question, the fact that between gold and silver ETF we are almost 35, 40% of the entire industry.
So I think we’ll continue, I think. We believe this does not have any much additional cost. This is a scale game and this is not a business which can be replicated very easily. Again, I repeat, globally, country after country, the top three, four players will have 80, 90%. Then you have a long tail with 2, 3, 4%. So that is one, I think on the yields.
Parag Joglekar
Yeah, so the yields are the blended yield for ETF is around 20 basis. And so it’s a very, very profitable, profitable business to run as the cost is very lean and the new increase in the EM doesn’t really require to have a higher cost element. So it’s a very profitable business.
Prayesh Jain
Got that? Thank you so much.
operator
Thank you. The next question is from the line of Mohit Mangal from Centrum. Please go ahead.
Mohit Mangal
Yeah, thanks for the opportunity and congratulations on a good set of numbers. My first question is towards the FIS strategy. First of all, how do you intend to take it forward? And now it is a six member team, so how will the economics work in terms of yield and profitability?
Sundeep Sikka
So I think as you rightly mentioned. I think we have a team led by Andrew Holland I think and we are very, very bullish and excited about, about SIF. We believe it had just started over the last three, four months, ever since the scheme started, which are about 3,4000 crores have been collected. But this is. If I was to go back, it’s like starting of the mutual fund industry because for this segment, the segment which is the HNI segment, we have the accredited investors. We believe this will become a very, very important and a critical area.
And from our point of view, I think we will continue investing as a six member team today. I think we are at this point of time also back testing, getting a risk management ready. I think we believe this will be a very important segment. If I was to look at, I think what you talked about, the earlier question I was to go a separate vertical of ETF and passive was discussed. I think, I believe when we will be discussing five or ten years down the line, SF will be a separate business vertical and we’ll be discussing that in that much detail.
Mohit Mangal
Yeah, right. But do you think that, you know, for the same medium next two to three years will have decent yields on these businesses or do you think it will be little on a lower side?
Sundeep Sikka
I think it depends on different players, you know, how they want to approach it. Somebody may want to do it for aum, they want to do it lower yields. We are very clear, I think we would like to add value to the investors and do it at high yields. You know, so we do not want to run it like a liquid fund. We do not want to run it like a passive fund. I mean this is a specialized product. We clearly see. I mean if you can add value to the investor, the investor will be willing to pay.
So our strategy for SF will be not aum, but more profitability.
Mohit Mangal
Understood, this is very clear. Secondly, in terms of growth, I think, you know, I mean we had a very, very solid growth, I mean led by equity and debt. But I think liquid has kind of, you know, disappointed. So do you think that is a concern or will it bounce back in Q4?
Sundeep Sikka
I think I’ll rephrase the word disappointed to yeah, it was a little lower, but definitely I think you’ll see this, it’s a temporary thing, keeps happening at times. I don’t think so. You should, I think read too much into it. You know, I think overall as a company it’s a portfolio. There will be at times, you know, there could be a particular scheme or a set class which may Underperform for one particular quarter but I don’t. I’ll request you not to read too much into it.
Mohit Mangal
Understood. My last question is towards the performance. I think you know we have been in top quartiles here over a longer period of time greater than three years but I think in some of the schemes, you know, our short term performance has been little weaker. So are we coming out with any strategies to improve that or do you think that it will become more clear maybe next three to six months down the line?
Sundeep Sikka
I think even as we Talk Today almost 2/3 of our equities funds are in the top 2 quartile over 1 year bucket definitely we continuously keep monitoring our equity debt performance very closely. However, we have to also differentiate between noise and sound because I think what we have to see is last one year market has been volatile, has not moved in any particular direction and certain themes may not have played out the way we expected. But is it basically a reason for us to panic or try to change the portfolio? The answer is no. We stick to our conviction.
So I think this one or two quarters plus or minus does not matter. I think so effectively we are not going to be taking much a lot of extreme steps, you know, but we continue monitoring the schemes very closely.
Mohit Mangal
This is very clear. Thanks and wish you all the best.
Sundeep Sikka
Thank you.
operator
Thank you. The next question is from the line of Ankit Behani from Nomura. Please go ahead.
Ankit Bihani
Yeah, hi. Thank you for the opportunity and congrats on a good set of numbers. So my question is on the yield part. So the yield has held up quite well on a QQ basis while we have seen substantial growth in the lower yielding ETF space also. So what has led to that? And the second is, have you done any assessment on the new SEBI regulations and what could be the impact?
Parag Joglekar
So the yield on ETF is mainly driven by the gold and silver commodities ETF which has been little helping the yield to grow on the ETF side and which is resulting in the overall increase in the yield because the ETF has a PI is increasing in the overall aum so that has been helping to improve the Overall yield and ETFs. I think on the SEBI regulation, even. SEBI regulation I think so the regulator has been consistently taking steps in the interest of industry and the investor and this is I think so one of the step in same direction coming to specific the removal of the PI basis exit load will surely have some impact on the overall industry equity oriented AUM and even the revision in TR SLAB Will have some impact on the bigger scheme but on the smaller scheme it will see some benefit. Lastly the brokerage on the cash transaction was reduced to 6 basis against 12 basis. But the average brokerage used to be in the range of around eight eight, eight and a half basis on cash transaction.
So there is no much dip on that side. So I think so this will. This will not have a major thing to read currently. Anything which comes on as an impact will we’ll have to look at how we will adjust or do it in our financial how to do pass on or anything.
Sundeep Sikka
And I’ll just also to add to what Parag mentioned. I think over the last two, three years as I’ve always mentioned, irrespective it’s not the regulator, whether it’s a regulatory push, whether it’s to be the investor demand, one needs to be mentally prepared that I think the yields can come down by a few. One or few basis point year after year. And that is a direction I think we’ll keep moving whatever the reason. The idea is how do you build up efficiency in the company to absorb that.
Ankit Bihani
And just. Just a follow up. So on the ETF space so the what I could understand the yields are higher on the gold ETF side. Could you give a number? I think 30, 35 bip would be a fair assumption.
Sundeep Sikka
I think blended is 20.
Ankit Bihani
But what would be for the gold silver ETFs.
Parag Joglekar
Gold is around. It’s. It’s. You can check in DTR DTR because it’s public document. Gold is around 60 basis and silver is. Silver is around 30 odd basis.
Ankit Bihani
Okay, 60 for gold and 30 for silver. Thank you.
operator
Thank you. The next question is from the line of Rahul Kumar from Vaikorea Fund. Please go ahead.
Rahul Kumar
Yeah. Hi. Just one question actually. Can you help us understand the trends on the net flows on your small cap funds?
Unidentified Speaker
Yeah. Hi. See the small cap fund as you know that it’s been almost two years. We have stop taking lump sum investment. We were very clear that at that point in time the market was getting overheated. And I think we were right to have arrested more flows in this fund as we speak we continue to be in that camp. You know like you have heard Parag saying that last year also the small gap index did have a negative return. The valuations are still stretched though. You know there is some news flow or noise about small caps getting rightly valued.
But we are in the camp of still observing the valuation movement from year on. The earnings trajectory also is going to be something which we are going to look at very minutely from Yuan. So maybe at this point in time we still believe that flows into this fund should be through sip. We have not yet seen any sort of negative net flows in this fund. This fund continues to be net sales positive. But yeah, directionally the inflows are going down because lump sums we don’t accept.
Rahul Kumar
Okay, okay. And I think on flexicap you mentioned. That you seem to be seeing a strong traction and over there it seems that you’re trying to improve here. This can you help us understand on that front as well?
Unidentified Speaker
Yeah. So if you go back to history, you know, this flexicap category in the industry is a new category which was, you know, approved by Sebi and that’s when you know, many of the multi cap funds or the large and mid cap funds, you know, which were having a flexi sort of a strategy got, you know, migrate or migrated into the flexicap category. And that’s the reason why this category became big. We were late starters in 2021, we lost our fund and it’s a five year product at this point in time. The mid and small cap correction which has happened has impacted, does impact the fund performance in the near term.
Hence what we are looking at is that how do we bring in more stability into this performance and that should lead us to start getting more, you know, market share in the flexicap category. So that’s the, you know, that’s where we stand at this point in time. So for sure money flow and SIPs are moving into this category. As you also should know that the flexicap categories in the industry are more large cap oriented. We want to be true to flexicap. Hence sometimes near term performance might impact the, you know, the near term return. But we will stick to our mandate of being true blue flexi gap.
operator
Thank you. The next question is from the line of Abhijit Sakhare from Kotak Securities. Please go ahead.
Abhijeet Sakhare
Hi, good evening everyone. My first question was is it possible to indicate or give some sense of what would be your flow market share in gold and silver etf.
Sundeep Sikka
It will be approximately 30%.
Abhijeet Sakhare
Got it. And like in terms of yields, what I saw from from disclosures is that the yields on the gold and silver ETF, if I kind of combine that book, is probably better than what you get on your equity book. So the question here was that as we look into the next few quarters, do we get a sense that it’s possible that our yields kind of inch upwards could remain flat even while the Overall, AUM keeps growing.
Sundeep Sikka
Again. We won’t be able to do a futuristic thing. But the only thing specific to ETF I can share with you, I think higher liquidity. You know, I think when there is a high liquidity, it allows you. It adds value to the investor by low tracking error, low impact cost and allows you or gives you the cushion to charge higher. That’s the only thing I can share with you, you know, at this point of time which way it will go, we do not know, but because the mix will keep changing. But the only thing, I mean generally when it, when we talk of ETFs and I’m not sticking to gold or this thing, liquidity helps you, I mean, helps the investigate a lower impact cost tracking error, lower tracking error and these two things put together.
If you get it right, I think it allows you the capability to charge higher. Whether you charge or not is a different thing, but it allows you to charge higher and you are not forced to play a game of lowering the expenses to garner aem.
Abhijeet Sakhare
Got it. So is it fair to assume that your like price to NAV gap or the tracking errors would be like one of the best in these two categories?
Sundeep Sikka
Very much.
Abhijeet Sakhare
Okay, got it. And then on the opex, did I hear this number correctly? That for next year we are looking at somewhere close to 15% headline growth in overall OPEX.
Sundeep Sikka
We’ve been consistently saying, I think we can look at expense, you know, growth of about 15%, you know, plus, minus, you know, 1, 2, you know, that’s what we want to say.
Abhijeet Sakhare
Okay, got it. That’s all from my side. Thank you so much.
Sundeep Sikka
Thank you.
operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Meghna Lutra from Inquired Equities. Please go ahead. Sorry ma’, am, we are unable to hear you.
Meghna Luthra
Hi. Am I audible now?
operator
Yes, please go ahead. Yeah.
Meghna Luthra
Hi. Sorry. Thank you for the opportunity, sir. I just wanted your. Your thoughts around the SIP movement. Do you think it has any correlation with the slowdown in thematic and sectoral schemes or general market sentiment is broad market sentiment is what it is following. Do we see the that the pace of SIP flows will now stagnate or plateau at these levels?
Sundeep Sikka
I think it will be very difficult to predict that. It will depend on basically. See what we have seen in past is, you know, I think it depends on which segment you’re catering to. When you look at the segment which is basically SIPs, which are. Let’s take 20,000, 50,000 and above. I think they are more vulnerable to market conditions compared to very small retail ticket size. They are not as much vulnerable. So I think we continue, our focus continues to be on very small ticket size. That is one. Having said that, whenever I think it’s not a thematic or this, you know, if investors over a longer period of time, you know, see over two, three years time, I think the returns are not there, you know, there can sentiment point of view, they can definitely be slowed down.
I’m not saying it will go negative, but I think growth can slow down for sure. If it’s over a longer period of time, investors see negative growth or no growth in the portfolio.
Meghna Luthra
Got it. So on the ticket size, what would be our average ticket size on the SIP? On SIP.
Sundeep Sikka
For us, I think 75% of SIPs by value are less than 10,000 rupees.
Meghna Luthra
Okay, so that’s very granular. Got it. And sir, again a similar question on the offshore fund is there how do you think that the book will move going forward? I know it is difficult to give guidance but any sentiment or color on that?
Sundeep Sikka
Nothing broadly. I think I would I mentioned in past also I think clearly we would have expected offshore contribution to be higher than. It’s taken a little more time. It’s a little binary, you know, unlike sift, you know, when we talk, I think when you’re doing, you know whether you’ll get 1 lakh SIP or 90,000 SIP or 1 lakh 10,000 SIP, you know, I mean it’s very easy to predict. You know that could be plus minus 10% variation. But these majority of these businesses are very, very institutional deals, mandates. It will be difficult to predict which direction will go.
But all I can share with you, I think I shared in the last meet also that there is a lot of work in progress that is going on. Clearly a lot of work going on in Japan. I think we launched the first NISA scheme in Japan. I think the India scheme under NISA regulation in Japan, as I mentioned in my speech earlier, our AIF is getting into a JV with DWS. Again the idea will be get more global flow into India. So this is again continuous work in progress. Will be very difficult to give a guidance on this.
But very clearly in the last few years also UNSNR depreciation has also gone against, you know, I mean against us, you know. But I think there’s a lot of work in progress you would see over the next two, three years. I think more positive numbers on this compared to what we have seen in the last five years.
Meghna Luthra
Okay, got it. That’s. That’s very helpful. And so on this deal do you think. I mean I know it is a small, I mean proportion of the whole book. But can you give more color on this, on the transaction, when is it likely or anything?
Sundeep Sikka
I think at this point we will. Not as shared with the stock exchange of 13th of November. I think it is our intention to. It’s a non binding, I think agreement. We have got into dws. I think as and when there is further update I think we’ll be coming back to you. Sure.
Meghna Luthra
And lastly on getting this guide on the ESOP expect what it was this quarter and how do we look at it going forward?
Parag Joglekar
Yeah. So ESOP excellence for this quarter was around 11 crores. And. And for next year on the of the current ESOP scheme we are expecting ESOP expense rate of around 26 crore for the next financial year.
Meghna Luthra
Okay, got it. Thank you. That’s also mine.
operator
Thank you. The next question is from the line of Mohit Mangal from Sandra. Please go ahead.
Mohit Mangal
Yeah, yeah. Thanks for the follow up. Just one question. So last quarter you said that you know you have been successful in rationalizing distributor commission across four equity schemes which covered around 60% of total equity. Any further, I mean developments in this quarter.
Sundeep Sikka
I think it will be very difficult. Directionally we’ll keep moving in the direction. I think quarter by quarter number of schemes will be very difficult to you know share with you. But directionally as Parag mentioned I think even with respect to the SEBI changes, you know the new regulation we’ll try to mitigate any impact on us by either absorbing, getting either by getting better efficiency or passing on. I think we’ll continue working on those lines.
Mohit Mangal
This is helpful. Thank you.
operator
Thank you. Ladies and gentlemen, we now come to the end of this earnings call. I now hand the conference over to the management for closing remarks. Sorry sir, we have one. One more question. It is from the line of Gaurav Jani from PL Capital. Please go ahead.
Gaurav Jani
Thank you. So just two quick questions. You mentioned the ESOP charge for the quarter to be about 11 crore. The notes to accounts mentions about 6 crore. So where is the disconnect? Please if you can explain.
Parag Joglekar
So the 6 crore pertains to the new ESOP scheme which was granted in the current financial year. And 11 crore is the overall expense including the new scheme and the old scheme.
Gaurav Jani
Okay, understood. That’s clear. Secondly, I had. I had a question on the labor code impact. Right Incrementally So this quarter we have taken the one time by how much would the staff cost, you know, increase or how should we kind of look at that?
Parag Joglekar
So the labor code impact, it’s a one time changes to the graduate. There are still some, some clarification is still awaiting. So we will do an equal if anything in the March quarter. But the one time impact is on the gratuity changes on the basic and definition of wages which has been notified, which has been taken in the financials.
Gaurav Jani
So as of now, sir, no incremental material impact seems to be there.
Parag Joglekar
No, for the gratuity at least we have, we have worked out on the. As per the law.
Gaurav Jani
Okay, thanks. That’s it.
operator
Thank you, ladies and gentlemen. We’ll take this as a last question for today. I now hand the conference over to the management for closing remarks.
Sundeep Sikka
Thank you everybody for joining this call. If you have any questions, if you need some inputs, you can reach out to our IR Arash and he can help you to answer the questions. Thank you and good night.
operator
Thank you very much. That concludes this conference call. Thank you all for joining us today and you may now disconnect your lines.