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Digital payments and financial services company PhonePe has applied for a mutual fund licence with the Securities and Exchange Board of India (Sebi).

According to the markets regulator website, Flipkart-backed PhonePe Private Ltd filed for the licence on 31 December, joining six other companies awaiting approvals.

Applications of Deepak Shenoy’s Wizemarkets Analytics Pvt. Ltd. (Capitalmind), Samir Arora’s Helios Capital, Rakesh Jhunjhunwala’s Alchemy Capital and Kenneth Andrade-led Old Bridge Capital Management Pvt Ltd are under process. Further Angel One Ltd and Unifi Capital Pvt Ltd have also applied for licenses.

Notably, Bajaj Finserv Ltd, Zerodha Broking Ltd and Frontline Capital Services Ltd have already received in-principle approvals from Sebi.

Sachin Bansal, who is the co-founder of Flipkart, is also the founder of Navi Mutual Fund, which had average assets under management (AAUM) of 92,959.98 crore for the October-December 2021 period.

The Indian mutual fund industry is one of the most hotly contested sectors with 45 players existing in the country and more players looking to enter.

This space has also witnessed some consolidation in the recent past. In December, HSBC Holdings Plc’s Indian asset management unit agreed to buy the mutual fund unit of L&T Finance Holdings Ltd for about 3,191 crore to bolster its wealth management business.

Further, in 2020, global financial services group Manulife had acquired a 49% stake in Mahindra Asset Management Co. for 265 crore.

The Indian mutual fund industry has seen a rapid pace of growth over the past few years. As per the data available with the Association of Mutual Funds in India (Amfi), the MF industry’s assets under management (AUM) have grown from 16.50 trillion as of 30 November 2016 to 37.34 trillion as of 30 November 2021, showing more than two-fold increase in a span of five years.

Further, in an eventful year for the domestic mutual fund industry, AUM of fund houses, excluding domestic fund of funds (FoF), surged further to close at a record 37.73 trillion, according to a report by global analytics company, Crisil Ltd.

The industry added 6.70 lakh crore, a record absolute asset gain for any calendar year on record. As per Crisil, the previous peak was 4.80 lakh crore in 2017, followed by 4.5 lakh crore in 2020. In percentage terms, the industry gained 22% in 2021 compared with 17% in 2020.

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