Mergers And Acquisitions In The Indian Mutual Fund Industry: The Way Forward

Saurabh Raj, B.A. LL.B.(Hons.) 2016-21, Gujarat National Law University, Gandhinagar & LL.M. 2021-22, The WB National University of Juridical Sciences, Kolkata

ABSTRACT

The Indian mutual fund industry is not new to the phenomenon of mergers and acquisitions. It is also believed that more sophisticated products will be available for investment in the Indian markets, which will have higher risk and higher possibility of outperformance. Such trends will require technology and support from foreign companies, which means there may be more foreign companies entering the mutual fund market in the future. Additionally, the penetration of mutual funds in India stands at around 10%, significantly below the global average of around 55%.

These facts mandate more research to be conducted in this specialised area of law so as to understand the reasons which account for the below expected level of performance. However, very limited research has been conducted on the aspects of performance of merged mutual fund schemes in the world, in general, and in the Indian context, in particular. Moreover, since the amendments were made to the MF Regulations as recently as in the beginning of this month, there is no full-fledged literature on the effect of the profit criterion relaxation of sponsors on the future of mutual fund mergers, among other changes introduced.

Therefore, the researcher is confident that this article will help fill the existing research gap and initiate discussion on the role of SEBI in encouraging development of the mutual fund market in India.