Nuvama Wealth Management Ltd. board has approved the incorporation of a wholly owned subsidiary to run a mutual fund business after market regulator SEBI gave its approval.
The Securities and Exchange Board of India on Wednesday granted approval to the company to act as the sponsor and set up the proposed Nuvama Mutual Fund, thereby enabling it to launch schemes including Specialized Investment Fund category, according to a stock exchange filing.
"The final approval for registration of Mutual Fund will be granted by SEBI subject to fulfilment by the Company of the requirements stipulated in the said letter," it added.
Nuvama applied to SEBI for entry into the mutual fund business in January this year.
The incorporation of the wholly-owned subsidiary Nuvama Mutual Fund Trustee Services Ltd. is subject to the approval of the Ministry of Corporate Affairs and other relevant statutory and regulatory authorities.
Nuvama Wealth, formerly known as Edelweiss Securities, is an Indian financial services company based in Mumbai. The company is registered with National Stock Exchange of India, BSE and MCX Stock Exchange.
The company offers tailored solutions for high net worth individuals, UHNIs, and corporates and institutional investors with over Rs 4.4 lakh of assets under management.
India's mutual fund industry has boomed over the last several years as rising incomes spurred people to park money in market instruments for higher returns. The growth has invited the likes of Mukesh Ambani-backed Jio Financial Services Ltd. and major US fund manager BlackRock Inc. to enter the mutual fund business.
Shares of Nuvama Wealth Management settled at nearly 3% higher at Rs 6,492.95 on the BSE on Wednesday. The announcement came after marlet hours. The stock has fallen over 6% so far this year.
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