Nippon Life India Asset Management Ltd (NSE: NAM-INDIA) Q4 2025 Earnings Call dated Apr. 28, 2025
Corporate Participants:
Unidentified Speaker
Sundeep Sikka — Executive Director & Chief Executive Officer
Parag Joglekar — Chief Financial Officer
Saugata Chatterjee — Chief Business Officer
Arun Sundaresan — Head EIF
Analysts:
Unidentified Participant
Meghna Luthra — Analyst
Prayesh Jain — Analyst
Kushagra Goel — Analyst
Abhijeet Sakhare — Analyst
Raghvesh — Analyst
Mohit Mangal — Analyst
Madhukar Ladha — Analyst
Gaurav Jani — Analyst
Krishna Mundra — Analyst
Sayeed Jeffrey — Analyst
Bhavin Pande — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Nippon Life India Asset Management Q4NFY 25 earnings conference call hosted by Incred Equities. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone 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’am.
Meghna Luthra — Analyst
Thank you Mana and good evening everyone. On behalf of Incredibilities, I welcome all to Nippon Life India Asset Management’s 4th Quarter FY25 Earnings Conference Call. We have along with us Mr. Sandeep Sikka, Integrated Director and CEO along with the Senior Management team. We are thankful to the management for allowing us this opportunity. I would now like to hand it over to Mr. Sandeep Sikra for his opening remarks. Over to you Sir.
Sundeep Sikka — Executive Director & Chief Executive Officer
Thanks. Good evening everyone and welcome to our Q4FY25 earnings conference call. We have with us a CFO Parag Chief Business Officer of Other Strategy, Deputy CFO Amul, Chief Digital Officer Arpan Head ETF Arun Head Aif Ashish, Deputy Head Aif Ashwin and Matsui Son, Nominee of Data Life Japan. I would like to share few highlights of our performance and post that. I will hand it over to Paragraph our CFO to speak in greater detail on the recent industry trends as well as our performance post which we move to Q and A. Coming to the key highlights, I would like to start by mentioning that BAM India is the fastest growing AMC in the top 10AMCs on 1 year, 2 year and 3 year basis and we have also had the highest increase in AM share in the industry over the last two years basis.
Further, our equity sales market share and SIP market share both improved quarter on quarter and remain well above our equity market share. We achieved a high single digit market share in terms of equity net sales while our SIP market share has been greater than 10% in March 25. SIP market share has effectively doubled in three years from 5.15% in March 2020 to 10.6% in March 25, 10.16% in March 25 and this would form a strong foundation for our future growth. On the financial front, Land India has achieved its highest ever annual profit after tax INR 12.86 billion, a growth of 16% year on year as well as the highest ever operating profit of INR 14.04 billion and growth of 47% year on year.
We have a stated dividend policy to distribute 60 to 90% of our profits to our shareholders for FY25. The board of Directors have declared the dividend payout of INR 18 rupees per share that is 91% of net profit. This includes the proposed final dividend of of INR 10 rupees per share. I would like to address the recent cyber attack on IT infrastructure which we noticed which we notified to Those exchanges on 4-10-25 as a precautionary measure to prevent the spread of malware. All systems were isolated or powered down as soon as the threat alerts were received from monitoring systems.
All critical applications have now been restored. The fund management system was installed the next day morning itself. The mobile application of the websites are also back to normal. During this period customers were redirected to alternate channels which remained completely unaffected and hence there was minimal business impact. Due to this, we believe the company and the investor data is fully safe and secure. As mentioned in past, we will continue to focus on our non mutual fund business. In line with this, to offer Japanese investors greater access to Indian capital markets through the visa scheme in Japan, we launched Nepal India ETF Nifty 50B’s gift fund which will feed into the Nifty India ETF NIFT which will feed into Nifty India ETF 50Bs.
This launch is in collaboration with our partner Nisse Asset Management Corporation Japan. We which is a wholly owned subsidiary of Nippon Life Japan which has launched Nisei India Equity Fund in Japan to feed into this gift fund. This comes after our first gift fund Nippon India Large Cap Gift which We launched in January 25 to provide global investors an access to our flagship Large Cap fund. Our future product pipeline includes Longshot Fund, our second fund of fund which shall be investing in India focused venture funds and few more. Lastly, on the SI front, we have recently appointed industry veteran Mr.
Andrew Holland as the head of New Set Class and we believe that this offering represents significant growth potential going forward. In conclusion, I would like to state FY25 has been another strong year for NAM India and we are hopeful of sustaining this in the years to come. Now I will hand over the call to Parag for further details on industry and our performance.
Parag Joglekar — Chief Financial Officer
Thank you Sandeep. Good evening everybody. Let me start off with the markets. Equity market in Q4FY25 witnessed a drop from prior quarter levels. The Nifty declined by 0.5% quarter on quarter while the nifty mid cap and small cap indices declined by 9.6% and 14.9% respectively. RBI cut the repo rate by 25 basis to 6.25% while the 10 year G Sec yield decreased by 18 basis quarter on quarter to 6.58%. On a YoY basis the Nifty grew 5.3% while the Mid and Small Cap indices grew 7.6% and 5.4% respectively. Coming to data on the mutual fund industry industry quarterly average aum grew by 24.6% YoY but declined 1.7% quarter on quarter in Q4FY25 to INR 67.4 trillion.
The share of equity in overall AUM declined quarter on quarter ending at 60% for Q4FY25 from 60.8% in Q3FY25. Now moving to industry flows, the equity category excluding index fund and arbitrage fund witnessed a GROSS Inflow of INR 2.13 trillion and a net inflow of INR 1.04 trillion. Both Gross and net flows were lower in quarter on quarter categories with the highest inflows were sectoral thematic funds, Flexicap and small cap funds. Moving on to SIP investment via SIP route further increased with the SIP contribution for the quarter being INR783 billion up 37% YY and 2% quarter on quarter.
Monthly SRP flows in March 2025 stood at INR259 billion only 2% below the all time high of INR265 billion achieved in December 2024. The fixed income category witnessed a net outflow of INR809 billion in the quarter. The ETF category had a net inflow of INR 216 billion at the end of the quarter. UNEC investor in the mutual fund industry increased to 54.2 million that is an increase of 22% y oi. Now moving to our business performance we closed the quarter with the total asset under management of INR 6.54 trillion. This includes mutual fund managed accounts, offshore funds and Giftcity.
Our mutual fund quarterly average AM grew 29.2% YoY to reach INR 5.57 trillion. We were the fastest growing AMC in the top 10 players in FY25 and had the highest increase in quarterly average AUM market share on two year basis among all agencies. I would like now to now like to share few key highlights for the quarter starting with market share Our market share increased 30 basis YoY to 8.26%. Our equity market share increased by 10 basis YoY to 6.86%. Excluding arbitrage equity market share increased by 22 basis y OI to 6.92%. The share of equity AUM in our overall aum decreased by 1.3% quarter on quarter to 49.8%.
For Q4FY25. We achieved a high single digit market share in net sales in the equity and hybrid segment in Q4FY25. However excluding NFOs our market share would be in the double digits. We continue to have the largest investor base in the mutual fund industry with 20.8 million unique investors. We are humbled to have over one in three mutual fund investors invest with us during the quarter. We also completed an NFO of the Nippon Active India Active Momentum Fund as at the end of the quarter the AUM of this fund stood at INR 1.2 billion. I would also like to touch upon some of the important aspect of our SIP books.
I’m happy to share that there has been continued momentum in our systematic flows which has led to an increase in market share. SIP market share increased by 17 basis to 10.16% over December 24 to March 25. Our monthly systematic book rose by 37% YY to INR 31.8 billion for March 2025. This resulted in an annualized systematic book of INR 382 billion. Moving on briefly to the ETF segment, we continue to be one of the largest ETF players with AUM of INR 1.54 trillion and a market share of 19.07% which increased by 236 basis YoY. Our share in the industry ETF folios is 53%.
We also have a 53% share of ETF volumes on MSE and BSE. Our ETFs average daily volume across key funds remain far higher than the rest of the industry. Moving on to our digital branches, digital purchase transaction rose to 3.54 million in Q4FY25 up 49%. YY digital business contributed 74% of the total new purchase transaction in Q4FY25. For FY25, digital purchase transactions stood at 14.4 million, a two fold increase compared to FY24. By harnessing the power of digital innovation and executing a well crafted strategy, Nippon Mutual Fund has breached an inflection point achieving the accelerated growth, enhanced efficiency and a distinct competitive age.
Nippon Mutual Fund Best in Class Digital Assets Strong digital distribution framework and efficient campaign management strategies reinforce its leadership in the online space. Now I would like to briefly update you on our subsidiaries, namely the AIF and Singapore Subsidies. Starting off with AIF under Nepal India, we offer category 2 and category 3 AIFs and have raised cumulative commitments of INR 74.1 billion across various schemes. FR25 marked our highest ever incremental AUM race of INR 13 billion which is 2.2x of commitment raised in FY24. During the quarter we launched our 10 fund under our long only equity series.
Fundraising is currently underway for two of our listed equity AIF performing credit, gas and direct VC. Fund deployment across all strategies was robust in Q4 FY20 fund with 8 active investments in performance, credit and full deployment in our tech VC FOF across 14 funds with underlying exposure to 380 plus companies. The teams across all functions have been strengthened as well. On the offshore front, we continue to witness good equity inflows in the quarter from various international geographies. Offshore AEM grew 13% y1 to INR 152 billion with our UCIP Equity Fund reaching an AUM of USD 483 million.
We continue to expand our footprint in Japanese institution and retail space in conjunction with Nisei Asset Management Corporation Japan. We also continue to expand our footprints in new geography in the European region. Now on to our financial performance for FY. For Q4 FY25 revenue stood at INR 5.67 billion up 21% YoY. Other income stood at INR 0.23 billion down 75% YoY and up 50% quarter on quarter. Operating expenses stood at INR 2.12 billion are 14% YoY and flat quarter on quarter. Excluding the impact of ESOP, operating expenses grew 8% YoY for Q4 and 16% YoY for FY25 which was in line with our guidance driven mainly by investment in talent, non ML business and technology infrastructure.
Operating profit stood at INR 3.5 billion up 26% yy. Profits after tax stood at INR 2.99 billion, down 13% yy and up 1% quarter on quarter. For FY25, operating profit grew by 47% yoy to INR 14.04 billion and profit after tax grew by 16% yoy to INR 12.86 billion. Profit after tax is impacted by lower other income and higher tax rate y. As Sandeep mentioned earlier. For FY25 the Board of Directors have declared a dividend payout of INR 18 per share. That is 91% of net profit. This includes the proposed final dividend of INR 10 rupees per share.
Lastly, the Board of Directors in their meeting today have approved the following Based on the recommendation of LRC. Grant of 4.16,972 stock US under Nippon Life India Asset Management Performance Link stock unit scheme 2023 at INR 10 rupees per stock and grant of 70.23,149 stock option under the Nippon Line India Asset Management Limited Employee Stock Option Scheme 2023 at INR 577.79 per stock option. With this I would like to conclude my remarks and open the floor for questions.
Questions and Answers:
operator
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Before we move ahead with the questions, I would like to remind all the participants. You may press star and one to ask a question. We have our first question from the line off. Prayesh Jain from Modilal Oswal. Please go ahead.
Prayesh Jain
Hi, good evening everyone. Just a few questions. How do you see the SIP trajectory for the industry and for Nippon as such going ahead? We’ve been hearing a lot of closures and the incremental account openings have been weaker. How do you see that trend in this space, say over the medium term? Second is you mentioned about the expenses being in line with your guidance. How do you see the expenses in FY26? And you know it would be great if you could split up the employee cost into what kind of esop expenses we could see going ahead.
And lastly on the on the offshore business, I see a drop in sequentially in your managed assets from about 16,700 odd crores to about 15,200 odd crores. Sequentially. Is it only mark to market or what? There have been some outflows. How should we see this and do you see offshore? Given that Japan recently launched a new new scheme, do you see this contributing meaningfully over the next three to five years? Those would be my question.
Sundeep Sikka
So let me start by the last part of the question and then I’ll request chatty to answer on SIP and paragram expenses. First, the offshore the whatever you’re seeing is just a mark to market reduction, nothing else. Point Number one point. Number two, we are very excited about the launch of the new scheme that we launched in Japan which is under the LISA scheme which is one of which gives an access to Japanese investors to invest into India. And it’s a LISA scheme scheme which is the government of Japan is promoting Japanese digital investors to invest outside of Japan.
And we being one of the amongst all the Japanese asset management companies in Japan, we have the one which has the strongest business in India. We see ourselves to be a great beneficiary of this. Will not be able to give a futuristic number what it can contribute. But for sure directionally over the next one or two years Japanese retail money coming into India will become big and you will see us playing a bigger role in that. So that is our last question on the international and offshore Chetty, if you could answer on SIPs please.
Saugata Chatterjee
Yeah, I prayed with regard to SIP. I think you know what we are seeing in the last three months this quarter gone by. Of course at an industry level you have seen the sipbook has started now sort of becoming flattish. It happens whenever there is a market volatility. We are seeing some higher percentage of stoppages which are happening at an industry level. So those are temporary phenomena which we feel will go by as the market corrects and more education starts happening at the, you know, from an industry perspective. But when it comes to our business what we are seeing that since we in this particular last quarter our flows have been much better than the industry flows, our net flows actually in case of in sips, the net book growth what we are seeing is much better than the industry trend and our stoppages are also much better than the industry trend.
So what can happen from here on? You know though the overall volume has come down, time has come to diversify the SIP book into multiple categories which will probably give a better experience to the investor as they go ahead. And that’s our endeavor as a team. We are trying to even if the volumes go down we will be more focused on diversifying the SIP book into multiple categories and build products around SIP which will give more stability to the sib book as we go ahead from here on.
Parag Joglekar
So good evening Priesh. On cost side we will keep on investing in the future. So we are expecting a cost increase roughly in the range of around 15%. Exoffice of employee cost will be also in the similar range, maybe 14% of XRP. And the hit on the OR expense of the ESOP for the current quarter is around 11 crore and for the full year is in the range of around 43 crore.
Prayesh Jain
Just a couple of bookkeeping questions this for the full year what kind of ESOP cost should we build for FY26? Secondly, could you give us the ease across your. Across the asset classes. And lastly the tax rate has been significantly lower in this quarter. What are the reasons and how should we kind of model for FY26? Those are my questions.
Parag Joglekar
So the ESOP cost will be in the range of around 48,49 crore next year. Then the yield equity is 57. Debt remains 25. Liquid is in the range of around 10 to 12 basis. ETF remain 15 basis yield. Total yield is around blended yield is around 37 basis. The tax rate is slightly lower due to some of the assessment got over and we got some reversal on that. Otherwise the tax rate should remain in the normal 24, 25% which. Which is normal tax rate.
Prayesh Jain
Thank you. And all the rest.
operator
Thank you. We have our next question from the line of Kushagar Goel from clsa. Please go ahead.
Kushagra Goel
Yeah, thank you for taking my question. Just one question in your balance sheet number the property plant investment quite a bit. Just wanted to understand what was that.
Parag Joglekar
So around last quarter we purchased a corporate office in Parel area. So that is. That is what the cost which we incurred and that has been capitalized in that.
Kushagra Goel
Okay sir, got it. That. Thank you.
operator
Thank you. We have our next question from the line of Abhijit Sakare from Kotak Securities. Please go ahead.
Abhijeet Sakhare
Hi, good evening everyone. My first question is across your top three four funds, you know which attract highest share of flows. Can you comment how recent performance trends would have impacted those numbers? Any stabilization or dip that you’re witnessing there or continues to remain very strong. That’s the first question please.
Saugata Chatterjee
I think there’s whatever has happened in the market for the last one or two quarters, there is no direct linkage of that the performance on the flow of the business. I think we clearly believe the Indian investors overall it’s not only for us. I think short term performance dips in one or two quarters do not make any difference. We continue to see the same inflows in the top five funds and the trend has been the same for the last four or five quarters.
Abhijeet Sakhare
Got it. And then sir, secondly, just a follow up like we used to have a very strong small cap mid cap franchise and you know over the last 12 months we’ve tried to, you know, dive divert flows into some of the other larger categories as well. How has been the experience in terms of being able to create SIP accounts in those categories as against lump sum. And the point of view here is that just to get a better handle on stability of flows in some of the newer flows that we’ve been getting in the last six to 12 months.
Saugata Chatterjee
One thing we had strong franchise. We continue to have a strong franchise in smaller mid cap. That is point number one. I think the idea of having diverting the funds to other schemes it’s a part of I think idea is to keep getting allocation across categories. I don’t think so. It’s at a cost from one as to other. I think from our perspective the way we see is from a long term point of view we need to be basically across three or four bigger categories in the industry. Whether it’s small, small cap, whether it’s large cap, flexicap.
I think we want to be be in the top three or top five, you know whatever the allocations are coming. So it’s a planned strategy to get a market share across all the categories.
Abhijeet Sakhare
Got that. And just a number question if you could give the breakup of other income between debt and equity gains.
Parag Joglekar
Abhijit. We don’t disclose. I don’t have it handy.
Abhijeet Sakhare
Sorry. No problem. Thank you.
operator
Thank you. A reminder to all participants you may press Star and one to ask a question. I repeat if you wish to ask a question you may press star and one. Next question is from the line of Raghavesh from JM Financials. Please go ahead. Mr. Raghavish, are you there?
Raghvesh
Yes. Am I audible?
operator
Yeah.
Raghvesh
That’S on a strong set of numbers. So getting back to our, you know the set in the mid and small cap fund. So we have severely restricted using the set limits in these funds. So given the markets have been weak in these segments and have corrected are we considering opening it up to more investors in the near future? And secondly a kind of follow up on that asset market share is already a 10.2 even when we have restricted some of the inflows. How do we look at that had we not you know restricted and what would be a sustainable number if, if I’m looking at it from 26, 27 point of view.
Sundeep Sikka
As we have mentioned in past, I think we see this business, you know from a long term point of view and it should be sustainable. It’s not about a quarter on quarter. So for sure I think at this point of time we have not taken any view to remove the cap or to take more money into small cap I think as in a mistake. And I think we. But the only thing I Can share. Having said that, the fact the question that you asked had we not stopped, could this 10.1 or 110 + could have been more.
I think it is speculative thing, very difficult to comment on it. We believe by doing that and getting in flows into all other schemes we are making the foundation even more stronger.
Raghvesh
Just a follow up have we considered, I mean where are we on the entire distribution layout restructuring that we have done in the last couple of quarters? I mean what percentage of our AUM has been replaced in terms of distributed emissions and what more we are looking to do in the near future?
Sundeep Sikka
We have done around 45 to 50% of the overall emissions.
Parag Joglekar
Yeah. So strategy. So we have already, you know, 45 to 50% of our existing book has been, you know. Yeah. So it has been repriced and I think, you know we need to stabilize this as we go ahead from here on and as the business dynamics, you know, evolve from here on we see how we can look at, you know, further opportunities. But as of now I think the majority of the major part of the AUM has been, you know, refreshed.
Raghvesh
Thank you sir.
operator
Thank you. We have our next question from the line of Mohit Mangal from Centrum Broking. Please go ahead.
Mohit Mangal
Yeah, thanks for the opportunity and congratulations on a good set of numbers. So first is in terms of you know, investor segment wise breakup of aum. So we’re actually looking at you know, last three to four years data and I look, you know retail going forward and say corporate which was around 50 odd percent of the total AUM now is around 39, 40 odd percent. So going forward, I mean as per your analysis do you think this corporate number will shrink further and retail per section I will grow for grow from here.
Sundeep Sikka
I think our focus continues on retail. So retail will continue. I mean we believe that is where the biggest opportunity is. So I think all of the efforts across the company, across branches, across our digital properties and ecosystem continues to be on retail and hni. That does not mean we will not focus on corporate. The corporate is not something which you can directly control. But we clearly believe that going forward both when it comes to equity, 90% plus of the business will be from retail and HRI.
Mohit Mangal
Okay, understood. Next is in terms of the number of employees. I think we added about 160 odd employees, you know, in the last one year. Going forward do you think this number of 1165 will grow with the same run rate?
Sundeep Sikka
Not really. I think we had added the VR will be flat for last couple of years. So maybe Next year we may add about 75 to, you know, 75 to 100.
Mohit Mangal
Okay, so that run rate will come down.
Sundeep Sikka
Yeah.
Mohit Mangal
Okay, thanks and wish you all the best.
Sundeep Sikka
Thank you. Thank you.
operator
Thank you. We have our next question from the line of Madhukar Ladda from Noama Wealth Management. Please go ahead.
Madhukar Ladha
Good evening everyone. Thank you for taking my question and actually congratulations for a great set of numbers. So just two questions. First, I think you mentioned earlier that we’ve not participated in the new thematic sectoral sort of fund launches and still we’ve managed a high single digit market share in net sales and had we, if we exclude the NFO money then our market share actually in double digits. So are you saying rethink in this strategy and going forward, should we see new fund launches from you? And why are we not sort of doing that some thought process around that because you know, it definitely helps us build scale and we’re losing out on that additional flow that we could get.
Second, just on your staff cost, maybe I missed this because, you know, the line has kept disconnecting today for some reason. The ESOP costs, what are the ESOP costs in this year and you know, how should we think about ESOP costs going into next year and what would be sort of your expense guidance on an overall basis over the next couple of years that will help me. Thanks.
Sundeep Sikka
So Madhubur, I’ll take the first question on the nfos then I’ll request Parag to give you an answer on the ESOP cost and all. So I think, let me clarify first. I think our strategy over the last 2, 3 years has been not to launch new big mega NFOS thematic funds. And it’s by design, I think on the passive side we’ll continue launching wherever there’s new themes we have. Let the investor take the decision whenever he wants to enter any particular theme in passive funds. But for MFOs, we have our internal view that launching mega MFOS gives the short term kick, gives a short term, but from a long term stability point of view, if you do a deep dive into these numbers, a lot of this AEM gets shifted from scheme A to scheme B within the same AMC or from other schemes of other AMCs.
And our historical data shows us that NFO investors typically are not very, very sticky. We believe continue scaling up our existing products, continue getting investors who come because. Of the track record of the scheme. Rather than coming because of the hope of returns. So I think that’s had, I think big strategy and also what we want is NFOS many times distracts the company, distracts the sales teams. Everyone starts working on it. We continue focusing as I mentioned in past on building a strong foundation which is scalable in long run. I mean immediate short IMFOS doing 5,10,000 crores. I mean for the scale and size that we have, it’s very easy but it is. It requires a lot of conviction to say that we are not going to be participating in short term gain but continue really gaining money from a long term point of view.
So I think that’s the answer on the NFOs. Having said that, I think one more thing I would like to touch is since you touch are we losing out a big pool of money? Answer is no. If you see the investor pool, our investor base continues to grow faster than the industry. That is reflection of the fact that investors actually prefer schemes with long term track record. Selling NFOs with the hope of return is short term maybe a good strategy. But from a long term point of view these ourselves are not convinced that’s on the NFL for us.
Can you please answer on this?
Parag Joglekar
So Madhubur, the cost on the ESOP in the current year the expense is around 43 crores. In current quarter is around 11 crore. Next year we are expecting something in the range of around 48,49 crore. With both the ESOP seats. Our guidance on expenses currently this year we had ESOP around 15%. We will keep on investing in our business. So our guidance on our expectation is around 15% on next year also exa peso.
Madhukar Ladha
That’s on overall costs. Yeah. 15% growth on overall costs. Is it sir?
Sundeep Sikka
Yes.
Madhukar Ladha
Okay. Thank you. Thank you. And you know great performance. Excellent performance and all the best for the future. Thank you.
operator
Thank you. We have our next question from the line of Abhijit Sakare from Kotech Securities. Please go ahead.
Abhijeet Sakhare
Thanks for the follow up. I have a question on yield. So if I recall correctly, I think last quarter as well our equity yields were about 57 odd basis points. And if that number is correct, how has the recent commission cuts impacted the overall yields? Given that the equity AUMs are also down quarter on quarter.
Parag Joglekar
Abhijit overall the impact will be very on the yield basis may not be very great. It will be part of the overall yield. And this 57 last quarter may be on basis point or in decimals might have changed. So the overall yield remain more or less in the line. There may be some decimal changes.
Abhijeet Sakhare
Understood. And that the entire commission cut is now in the base right? There’s no more pending in fact to be taken. Right. Okay. Thank you so much.
operator
Thank you. We have a follow up question from a line of praise Jen from Motu Yaloswal, please go ahead.
Prayesh Jain
Yeah, hi. Just a couple of years back or a year back, we had a 70% volume share on exchanges. In terms of ETF, we’re now down to 53%. Is there anything to read into it? I know it’s still a very meaningful market share, but the plot has also been quite meaningful. Anything to read into it and how do you kind of aim to protect this? That would be my first question right now.
Arun Sundaresan
Abhijit. Hi, Arun here. So first of all you will appreciate that if you look at other numbers like net sales for example, and even this current volume way, way higher when compared to current market share. But the volume per se, it is. Part of the pie, right? With more players coming in that as a percentage might look a little on the lower side. And in some categories we are consciously not present, for example some of these, smart beta, et cetera, where the liquidity can be on the lower side which could impact the investors negatively. We may have decided not to launch ETF at this point in time. That also could affect Martins at the periphery. But having said that, this number is a high number and within that some categories like for example nifty, we command 73% of the volume and much of the net sales also happens in categories like nifty gold. So that’s where we are. Nifty gold and silver particularly our volumes are fairly, fairly high and much higher. Than our current market share.
Prayesh Jain
Got that. And a broader question on the debt side, we are heading in. We’ve already seen one rate cut and possibly we will see more rate cuts going ahead. The debt segment, how do you see the trends there? Do you think that it can revive? And you can see significant inflows there going ahead. How should we kind of look at this segment as such?
Saugata Chatterjee
Yes, I think you have analyzed it, right? What we are seeing in the last two months, the liquidity in the mutual fund industry has gone up in expectation of moderate rate cut, a moderate rate scenario. And also we have to also remember the fact that lot of these FDs which the banks had mobilized in the last couple of years are now coming for maturity. The rollovers will be at a lower yield. So and hence the mutual fund schemes start becoming the first port of call for investors. And we are seeing in the month of April and in the month of March, there was a good flow into the shorter end and the medium duration products and hence if the software regime continues, which we feel will be the scenario as we go ahead, there will be sort of inflow into these, these categories for sure.
Prayesh Jain
Okay, just one last question on the offshore business. What kind of easies we make on the offshore business and how is the trajectory there?
Parag Joglekar
Around 50 depending on this thing, around 6200 basis on which product equity and.
Prayesh Jain
That is a 6200. This is the range. Okay.
Sundeep Sikka
And also I think we like we mentioned earlier, we have a digital fund I think which again you know, the, which invested, which is a venture fund which comes under our AIF subsidiary for that also there comes a carry to come into play, you know, after a certain time. But that’s still a long time away.
Prayesh Jain
Any other geographies that you’re looking for to grow the offshore business apart from Japan in the near future?
Sundeep Sikka
I think we, from our perspective we continue leveraging the global network of Nepal Life. I think wherever I think till now, if you see most of our business that is coming international business is coming. Whether, I think if you look at a slide in the presentation, whether it’s coming through dwarf, whether it’s the. Which is Japan, BBLM which is Bangkok, Bangkok Life Asset Management and Cathay, which is Saigon. I think all these are companies where Nepal Life has state strategic interest or something. So we’ll continue. I think we don’t want to rename the wheel. We do not neither we have the direct capability.
We do not want to go out anywhere in the world and start afresh. So we’ll piggyback on the expert. But what you will see, Japan will continue to be our core.
Prayesh Jain
Got that? Thank you.
operator
Thank you. We have our next question from the line of Gaurav Jani from Prabhu Das Giladar. Please go ahead.
Gaurav Jani
Thank you for taking the question. Firstly wanted to check on the blended. Use and the related equity yields and. This will be the payouts. Given that we had already rationalized commissions for a few funds since with effect from February 1, you know, would there be any benefit in the next quarter? I mean what is your assessment of that?
Parag Joglekar
So the blended is around 37 basis, the equity is 57 basis. And the, the, the. The pact which has happened in the current quarter, which is already part of this, the yield and this will continue.
Gaurav Jani
I was asking on a net basis, you know, would that benefit also in the next quarter or all the benefit is already taken.
Parag Joglekar
Yeah, so it is already part of this and so that will continue.
Unidentified Speaker
Just to add to that, the blended is A combination not only of the yields but also of the mix. So if the ETF business grows at a faster pace then the yield will show a decline on a blended basis. But as we have been guiding in the past we expect a 2 to 3 year basis. 23 basis point decline year on year going forward as well.
Gaurav Jani
Sure. And lastly on esop. Right. So I believe there was a fresh issue because I guess the ESOP trajectory. That we have originally estimated there’s an increase in that. So can you just allow this to. What will be the cost in 26. And 27 put together?
Parag Joglekar
So if the current year it was around 43 crore. Next year we are expecting in the range of around 48. 49 crore.
Gaurav Jani
Okay. And FY27,
Parag Joglekar
FY30 will be lower than the number because it will go down. It will taper down. Correct.
Gaurav Jani
But any chance it is fell out. I mean because we follow trajectory right. In the software for 27.
Parag Joglekar
So Gaurav, I don’t have number right now. We can tell. I will let you know offline.
Gaurav Jani
Sure. Thanks. Thanks a lot. That’s it from my.
operator
Thank you. We have our next question from line off. Krishnam Mundra from nginvest. Please go ahead.
Krishna Mundra
Thanks for the opportunity. On the SIP side I just wanted to know the perspective. Know your perspective. Like can we assume that going forward given the direct tax limits being increased to 12 lakhs for individuals and 12 lakh 75 thousand for salaried individuals. More disposable coming in. More discussable income coming in the hands of individuals. Basically more of salaried individuals. So will that disposable income can it come into mutual funds through SIP or majorly this will go into consumer discretionary segments. Just wanted to know your analysis. Analysis from the past basically when such limits were raised.
Sundeep Sikka
So it’s very difficult to have a direct correlation between when disposable income increases and will that directly flow into consumption or into mutual funds. But our this thing dipstick says that I think clearly the awareness about mutual funds is increasing. The culture to invest in SIPSU is increasing and whatever is going to be the disposable income when it increases in your hand you will see a part of that coming. Surely part of that will be coming into sip. Will that entire amount come? I think it’s very difficult to predict. But definitely mutual fund industry and players like us who are very active in retail, very important for us will benefit from this taxation change.
Krishna Mundra
Thank you.
operator
Thank you. We have our next question from the line of say Jeffrey from AJANTA Capital please go ahead.
Sayeed Jeffrey
Thanks for the opportunity. Am I audible? I just had a couple of questions and now could you just share the net inflow numbers for the equity and the ETF segment for the fourth quarter and for the full year please.
Parag Joglekar
We don’t disclose the net sales number for specifically for us industry number. We have mentioned as a part of our speech and a part of our deck. Higher single digit or you know just about double digit in net sales.
Unidentified Speaker
Yeah. So we are let sales are higher single digit and exof enable higher double digit. So you may look at the numbers.
Sayeed Jeffrey
Right. Would you give out the closing AUM figures for the segments?
Parag Joglekar
So the, the closing overall around 5 lakh 54 thousand crore
Sayeed Jeffrey
and for equity
Parag Joglekar
it is around 2 lakh 76.
Sayeed Jeffrey
ETF sir if I can get.
Parag Joglekar
Liquid is around 33 thousand and debt is around 80 thousand.
Sayeed Jeffrey
This last question on the, on the SIP book now in terms of the mix of this sip what proportion would be towards a small and mid cap? Sir, any flavor if you can just give.
Sundeep Sikka
I think for us the top five funds are 80% of the funds. I think we do not give the breakup funda fund.
Sayeed Jeffrey
And for the last quarter or so has there been any change in that? Because I see the book has been relatively stable but has there been a change in that book over the last three months?
Sundeep Sikka
I think it’s broadly been the same. I think there’s nothing significant to report.
Sayeed Jeffrey
All right sir, thank you so much for this.
operator
Thank you. We have our next question from the line of Bhavin Pandey from Trust Platter Swells Manager Managers, please go ahead.
Bhavin Pande
Good evening. Am I audible? Congratulations team on a wonderful set of numbers and a wonderful effort. 25. I just wanted to touch upon the structuring of passive products and ETFs. Is that sole purpose just to minimize the business risk or we also look at expanding our offerings. Where an investor could have a repertoire of products it should also enhance returns from a diversification perspective.
Sundeep Sikka
Your voice was not clear. Could you repeat that please?
Bhavin Pande
Sure. I hope I’m clear now.
Sundeep Sikka
This is much better.
Bhavin Pande
Yeah, yeah. So when we look at structuring of products in the ETF and passive bucket. So the sole purpose is it just. To minimize the basis risk or we look at expanding our offerings in a way where an investor would have a repertoire of products which would enhance returns as well.
Sundeep Sikka
So I think from our point of view, I think it’s definitely our thought is that I think we need to offer different type of funds, different styles, different categories of funds. In passives to the investors and let the investor make a decision. We do not do it with the intent what is good for us. We do not want to do it with intent that the investor will make a better return. There’s a reason why we do not do active funds. Big enough force out there. Our strategy is very different, but for passives. Our approach is to keep launching products, keep them available on the shelf and let the investor, with the help of his advisor, decide which one he wants to invest.
Bhavin Pande
Okay. And any conscious effort is there to minimize the basis risk.
Sundeep Sikka
Basis risk?
Bhavin Pande
The tracking error.
Sundeep Sikka
The tracking error. It’s conscious. There’s a lot of science and art behind it. It’s definitely. That’s the core of the whole business. I think as we have mentioned in past, ultimately many times when the markets are not matured, investors feel that the only thing that matters is the expense. But in reality, the liquidity and the tracking error are the two most important things. And they majority of our focus is to keep have lower tracking error and higher liquidity. So the impact cost for the investor is not there.
Bhavin Pande
Okay, that is helpful. Thank you. Mr. Shikhar, congrats to you, the entire team for a wonderful year and good luck. Thank you very much.
Sundeep Sikka
Thank you.
Unidentified Speaker
Thank you.
operator
Thank you. Ladies and gentlemen, due to time constraint, that would be our last question and I now hand the conference over to the management for closing comments.
Sundeep Sikka
Thank you all for joining the conference call and wishing you a happy new financial year. Thank you
operator
on behalf of incred equities. That concludes the conference. Thank you for joining us and you may now disconnect your lines.