HDFC AMC shares jumped over 5% in early trade on Thursday after the Securities and Exchange Board of India (SEBI) announced a cut in mutual fund expense ratios, a move that is being seen as positive for large and well-established asset management companies. As of 10:13 AM, the shares were trading 4.82% higher at Rs 2,663.60.
The rally came a day after SEBI, on December 17, 2025, decided to reduce the costs that mutual funds can charge investors. The regulator’s decision aims to make mutual fund investing more affordable, encourage higher retail participation, and improve overall transparency and compliance in the industry. Following the announcement, several AMC stocks saw strong buying interest, with HDFC Asset Management Company emerging as one of the top gainers.
According to SEBI’s notification, the existing expense ratio framework has been restructured, and the limits will now be referred to as the Base Expense Ratio (BER). Importantly, the BER will exclude all statutory levies such as GST, stamp duty, SEBI fees, exchange fees, and other regulatory charges. This means these statutory costs will no longer be bundled into the expense ratio charged to investors.
SEBI also clarified that the total expense borne by investors will not simply be a combination of the BER along with brokerage, regulatory, and statutory levies. This change is expected to bring greater clarity on the actual fund management costs and ensure a more uniform cost structure across schemes.
The revised expense ratio norms apply across a wide range of mutual fund categories. These include index funds, exchange traded funds (ETFs), fund of funds (FoFs), equity-oriented schemes investing more than 65% of assets under management in equities, other FoFs, closed-ended schemes, and schemes other than equity-oriented funds.
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