Japan’s Nomura to apply for MF licence

NEW DELHI: Nomura Holdings, Japan’s largest securities firm, is planning to enter the asset management business in India. The company, which posted $14 billion in revenues for the fiscal ended March 2006, will soon file for a mutual fund licence with market regulator Sebi. “Nomura is planning to set up its AMC in India. At this point, I can’t give more details,” a company spokesperson told ET.

Regulations allow foreign companies to set up wholly-owned AMC business in India at an initial investment of $50 million. If a foreign company enters the market through a joint venture with an Indian partner, the cap can be as low as $5 million. Sources close to the development said Nomura Asset Management (NAM) is in talks with Indian banks for its proposed AMC business. A final decision, however, is yet to be made. NAM has offices in New York, London, Singapore, and Hong Kong.

It provides asset management services to European and US public pension funds, foreign governments and governmental institutions and corporate pension funds. As on December 31, 2006, NAM had $143.77 billion as assets under management (AUM) in investment trusts and manages another $59.96 billion in institutional investment management. The company also has five exchange traded funds.

NAM is the latest foreign company looking to enter the booming mutual fund business in India. Shensei and Mirae are two of the largest Korean financial services companies that are planning to foray into the Indian mutual fund industry. While Shensei is said to be in talks with Andhra Bank, Mirae will set up a 100% subsidiary in India.

British investment company Dawnay Day recently got Sebi approval to rollout its mutual fund business in India. The mutual fund industry has been growing at a rapid pace. The AUM of the industry witnessed a 64% growth in the past two years from Rs 207,842 crore in January 2006 to Rs 340,965 crore as on January 2007.