HDFC AMC To BSE: Motilal Oswal Initiates Coverage On Capital Market Firms

The "remarkable" growth of the Indian capital market in the past five years from multiple tailwinds has compelled Motilal Oswal Financial Services Ltd. to initiate coverage on various asset management companies and wealth managers.

The growth in the past five years marks the beginning of a sustained, multi-year structural uptrend, fuelled by favourable demographic trends, Motilal Oswal said in a note.

"Digital enablers such as e-KYC, UPI, and Account Aggregation have played a key role in facilitating this growth," it said. This evolution is expected to continue driving substantial changes in customer behavior and further stimulating growth, the brokerage added.

Demat accounts surged 4.4 times, NSE active accounts surged 4.9 times, unique mutual fund investors jumped 2.4 times and monthly SIPs rose 3.2x times from fiscal 2020 till October 2024, the note said.

Regulatory reforms have further strengthened the ecosystem, enhancing transparency and security for investors, the brokerage said. "AMCs, exchanges, brokers, wealth managers, and other intermediaries are well-positioned to capitalize on these emerging trends," it said.

Motilal Oswal initiated coverage in the AMC sector with a 'buy' rating on HDFC Asset Management Co., Nippon Life India Asset Management Ltd., Aditya Birla Sun Life AMC Ltd. and UTI Asset Management Co.

On the exchanges and brokers front, Motilal Oswal revised their recommendation to 'buy' on BSE Ltd. and 'neutral' on MCX Ltd. The brokerage reiterated its 'buy' on Angel One Ltd.

Among wealth managers, Motilal Oswal initiated coverage on Nuvama Wealth Management Ltd. with a 'buy' rating and assigned a 'neutral' to Prudent Corporate Advisory Services Ltd. and Anand Rathi Wealth Ltd.

The recently announced regulations on derivates trading could hurt volumes intermittently, the brokerage said. "But, we expect the growth trajectory to pick up once the base is reset."