Shares of 360 One Wam Ltd declined over 3% on Wednesday, October 29, following the release of SEBI’s consultation paper proposing revisions to mutual fund (MF) regulations. The proposed changes, which aim to simplify cost structures and lower total expense ratios (TER), have raised concerns about a potential earnings impact on asset management companies (AMCs). The stock traded at Rs 1,136.40, down Rs 35.40 from its previous close of Rs 1,171.80 on the NSE.
Regulatory Development
The Securities and Exchange Board of India (SEBI) has unveiled a detailed consultation paper to overhaul the mutual fund expense structure. The paper proposes the removal of the additional 5 bps TER that was previously permitted and a reduction in the base TER for various mutual fund categories.
These measures are intended to make mutual fund expenses more transparent and reduce the costs borne by investors. However, they could potentially lead to a 7–8% hit on AMC earnings if the 5 bps removal is fully absorbed by the fund houses instead of being passed on to distributors.
Impact on 360 One Wam
According to early estimates, 360 One Wam, which has a presence across asset management and wealth advisory, could see a 2% earnings impact from the proposed changes if mutual fund commissions are reduced to offset the hit.
Brokerages tracking the sector noted that while the direct effect on AMCs may be moderate, wealth and distribution businesses like 360 One could experience near-term margin pressure as the new cost structure gets implemented.
Stock Performance and Market Metrics
At 9:33 AM on Wednesday, 360 One Wam shares were trading at Rs 1,136.40, marking a 3.02% intraday decline. The stock’s day range stood between Rs 1,104.20 and Rs 1,146.60, with an average trading volume of 790,750 shares.
The company’s market capitalization stood at Rs 4.60 lakh crore, with a price-to-earnings ratio of 41.09 and a dividend yield of 0.88%. Over the past year, the stock has traded between Rs 790.50 and Rs 1,318.00 on the NSE.
Conclusion
While SEBI’s proposal to simplify mutual fund expenses aims to benefit investors through lower costs, it has triggered caution in the market for AMC-linked and wealth management stocks. For 360 One Wam, the near-term focus remains on how fund houses and distributors adjust to the proposed removal of the additional 5 bps expense allowance.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
