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Informist, Thursday, Dec. 18, 2025

 

By Simran Rede

 

MUMBAI – Traders aggressively added bullish bets to the derivatives chain of HDFC Asset Management Co. Thursday as the cut in the expense ratio of mutual funds was lower than initially proposed by the Securities Exchange Board of India. Premiums on out-of-the-money call options increased manifold, while those on put contracts declined sharply, indicating a near-term possibility of an upside in the stock.

 

SEBI on Wednesday cut the expense ratio limit by 10 basis points across most asset-under-management slabs after excluding statutory levies. This is lower than the 15 bps cut SEBI proposed in its October consultation paper. This new regulation for asset management companies, brokerages, and distributors will take effect on Apr. 1.

 

The watchdog also reduced the limit on brokerage fees paid by AMCs for cash market transactions to 6 bps from the existing 12 bps, including statutory levies. For derivatives transactions, the cap has been reduced to 2 bps from 5 bps earlier. 

 

Brokerage firm JM Financial Services expects only a marginal impact of the market regulator's latest regulations on asset management companies. The regulator removed the 5-bps expense allowance charged on schemes with exit loads. The broking firm said the revision to the total expense ratio is likely to offset the adverse impact of removing the exit load.

 

Shares of HDFC AMC closed over 7% higher Thursday at INR 2,722.90 on the National Stock Exchange. The stock is expected to test the INR 2,950 level in the near term and may find support at INR 2,550-INR 2,500, Vipin Kumaar, derivatives and technical analyst at Globe Capital Market, said.

 

The HDFC AMC stock fell sharply in October after SEBI proposed a significant reduction in mutual fund expense ratios. Following this, the stock continued to decline and as of Wednesday was down nearly 6% since SEBI's October consultation paper. On Thursday, the stock reversed all these losses and gained further on the new rules.

 

"On charts, it has formed a fresh buying pivot with a significant rise in volumes from the price support of 200 DEMA (double exponential moving average)," Kumaar said. "Considering its current chart structure along with the derivatives data, we expect it to continue its northward journey," he added. 

 

In HDFC AMC's options chain, the highest open interest additions were in INR 2,800 call and INR 2,700 put contracts expiring this month. The maximum open interest was at the INR 2,800 call and INR 2,600 put contracts. Premiums on call options of INR 2,750-INR 3,000 strikes expiring on Dec. 30 rose 5-9 times and those on put contracts of INR 2,700-INR 2,400 strikes fell 82-90%.

 

--Nifty 50 December closed at 25882.20, down 15.60 points; 66.65-point premium to the spot index
--Nifty 50 January closed at 26045.00, down 16.80 points; 229.45-point premium to the spot index
--Nifty 50 February closed at 26192.00, down 20.40 points; 376.45-point premium to the spot index

 

ICICI Bank, HDFC Bank, Infosys, InterGlobe Aviation, Reliance Industries, Hindalco Industries, HDFC AMC, Tata Consultancy Services, Vedanta, Vodafone Idea, BSE, Dixon Technologies (India), Hindustan Zinc, Shriram Finance, State Bank of India, Mahindra & Mahindra, Hero MotoCorp, and Axis Bank were the most actively traded underlying stocks Thursday.  End

 

Edited by Saji George Titus

 

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