It is kind of an aberration or I do not know, is it an aberration, what could have triggered the data for the month of July?
Feroze Azeez: See, if you look at data of the inflow, it is a record high and the net flow is significantly low. Why do I call it a record high? If you see one month jump in SIP numbers from 21,260 to 23,332, this is a 2,000 crore jump in one month of an SIP inflow. Sanjay bhai is there. He has been collecting SIPs and the abhiyan chala rahe hain. It cannot be just retail contributing Rs 22,000 crore increase in SIP.
The HNI is also using SIP as a route, that is one clear inference which is coming. Like NJ and Prudent are the largest SIP garnerers for the country. And I would not be surprised if NJ’s number after 30 years is 1,500, 1,800 crores of SIP. And one month, the SIP has gone up by Rs 2,000 crores. So, one inference is HNI is using SIP as the route of entry because of the levels that is point one.
Point two, I think AMCs are looking at the numbers a little incorrectly, which makes them, wo kehte hai na, Galib yeh dil ko bhelane ke liye khayal achcha hai. Because there is no way to segregate a folio as SIP folio and lump sum folio.But you register SIP? Lump sum, you do not register.
Feroze Azeez: Okay, let me give you a couple of examples. My chauffeur, my driver does an SIP of 4,000. He does 2,000. I add 2,000. He has accumulated in the last six years in HDFC Flexi Cap, four-and-a-half, five lakhs. Now, will he not be worried that his lifetime, 30-40% of his lifetime savings is in one scheme? He is redeeming that and continuing the SIP of 4,000 and redeeming this from an SIP folio and doing lump sum folios into six schemes. Will you call this a redemption from SIP?
Technically not. Clearly not.
Feroze Azeez: But it classifies as a redemption. Bhai, kisi ki agar lifetime saving ek scheme mein chali jaayegi, accumulate karte hua, then it is logical that he will be worried of one scheme. Now, he is also looking at mutual funds sahi hai, but ek hi nahi sahi ho sakta 600 mein se. He will redeem and put it somewhere else, that is is called as lump sum, but it is nothing but his SIP accumulated.
Just money getting recycled.
Feroze Azeez: Again, on the contrary, I did exactly the opposite. I had an SIP running. I got some lump sum money. I bought in the SIP folio. Now you are counting that as an SIP inflow because you marked that as an SIP folio, but that is not an SIP from a net basis.
So, why segregate a folio as SIP folio and non-SIP folio when there is no marking? I have the right to buy an SIP in the same folio.
I have the right to buy a lump sum in the same folio. What you should look at is the net sale of equity mutual funds has been 37,082, which is a reasonable number.
The reality is mutual fund is losing HNI money to complex products, that is the reality. You may want to close your eyes when the cat drinks the milk. HNIs have moved money to PMSes in spite of risk being higher, concentration being higher, taxation being higher, commissions being higher. I think the last one makes my point.
So, that same point which is that there is this huge factor in the market which is the bedrock of the market that every month 20 to 22 thousand crore of fresh flows will come via retail investor. Since we are discussing data and now again a lot of opinions are floating around, this is gross, this is net, what is the realistic inflow in the equity market every month according to you?
Feroze Azeez: So, if you break this into three platforms, SIP, non-SIP is mutual fund platform. Then, AIFs, long only AIFs and PMSes. If you look at mutual fund, our estimate on a net basis lump sum mein aaya, if it came in lump sum, SIP, net is what matters, that is what I think we should look at as an industry, that is averaged at about 15-17 thousand crores for the last one year and I would not be surprised if that is going to be Rs 20,000 crores net, both lump sum and SIP for the next.
NFO, lump sum, SIP put together 15 to 80 thousand crore of fresh equity inflows are coming every month.
Feroze Azeez: Through only the mutual fund.
Through the mutual fund, okay. Now let us move to other categories.
Feroze Azeez: AIFs can be marked very easily because they use a pool account. PMS is very difficult because I open a PMS in the same PMS, Nikunj Sahib opens, we will still be trading in our own Demat accounts, it is not going to be very easy to decipher.
So, if I am looking at HNI money being ploughed through these two platforms, I would not be surprised that equal quantums are coming through that but not as numerically sharply measured.
And where is that number if you just have to do a rough maths for at least AIFs since we can match it and what is your understanding on PMS because I am sure you must have done some indirect work, there would be some market estimates which are floating around. So, net-net, so mutual fund is about 15 to 18 thousand crore, if you add back AIF and other PMS where would that number be according to you?
Feroze Azeez: So, there is one way to work out what is the net flow in each PMS. You look at the total mark to market but the AUM increase which is not explained by mark to market is the net flow. We did an estimate. We have done an estimate only for May, sorry it has not been updated, that was about Rs 9,000 crores. Because PMSes are done independently, so if a PMS grew by 10% in that month for example or 3% in that month but the AUM grew by 6%, the other 3% is the net flow. By that backward calculation we got Rs 8,000 crores.
We are looking at what about 30 to 35 thousand crore of net inflow coming by the Indian retail, DII or the HNI investor every month.
Feroze Azeez: I would not be surprised if that number is as accurate as it could get because you have broken it down.