Zerodha will form a joint venture (JV) with smallcase for its foray into the mutual fund business. Nithin Kamath, founder and chief executive officer of Zerodha, confirmed the development on Twitter.
“While awaiting final approval of our AMC (mutual fund), we asked if we should build it ourselves or collaborate. Given the 6+ years of experience that @smallcaseHQ has in building investment products, it made perfect sense to create a joint venture to build the AMC,” he said in his tweet.
Zerodha will be focusing on building low-cost passive mutual fund products.
Vasanth Kamath, founder of smallcase, said in his tweet, “The upcoming AMC will be a joint venture between Zerodha & smallcase and will use learnings & shared values from both cos (sic) to build an enduring fund house.”
Smallcases are baskets of stocks or exchange traded funds (ETFs) that are combined together to present an investment theme or strategy.
Zerodha had received in-principal approval from the Securities and Exchange Board of India (Sebi) in September 2021 on its mutual fund application.
Recently, Bajaj Finserv got the final approval to start its mutual fund business. Bajaj Finserv Asset Management (BFAML) has already filed for seven MF schemes with Sebi.
These are Bajaj Money Market Fund, Bajaj Overnight Fund, Bajaj Arbitrage Fund, Bajaj Large and Mid Cap Fund, Bajaj Liquid Fund, Bajaj Balanced Advantage Fund and Bajaj Flexi Cap Fund.
Apart from Zerodha, Helios Capital Management PTE and Old Bridge Capital Management have received in-principle approval from Sebi and are awaiting the final approval.
Unifi Capital Private, Alchemy Capital Management, Angel One, Emkay Global Financial Services, Abira Securities, Alpha Alternatives Fund Advisors and Wizemarkets Analytics (Capitalmind) are waiting for in-principle approval from Sebi.