Nomura expects the Indian asset management industry to enter 2026 on a structurally strong footing, supported by sustained equity flows and the rising adoption of passive products. The brokerage said equity and passive categories will remain the key drivers of industry AUM growth, with listed AMCs under its coverage well positioned to navigate short-term headwinds without material pressure on operating profitability. Despite near-term fluctuations in flows, Nomura believes the franchise strength, distribution depth and product diversification of leading AMCs provide adequate buffers against volatility.
According to the brokerage, equity AUM market share has been steadily improving for Nippon India AMC and HDFC AMC over the past few years, a trend it expects to continue as both players benefit from stronger flow momentum and improving fund performance. This consistency, Nomura said, supports the sustainability of premium valuations for these two AMCs. While the sector may not witness a major step-up in profitability in the immediate term, Nomura emphasised that operational metrics remain stable and the long-term structural story for large AMCs is intact.
Nomura added that the overall industry backdrop remains favourable, with SIP inflows at record levels, rising retail participation and greater acceptance of low-cost passive investing. With these drivers in place, the brokerage maintains a constructive stance on the sector and lists Nippon India AMC and HDFC AMC as its top picks.
Disclaimer: The views and recommendations above are those of Nomura. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
