Shriram Asset Management Co Ltd Management Discussions

Mutual Fund Industry Performance:

The Indian mutual fund industry continued to expand meaningfully in FY 2025-26, with assets under management (AUM) rising 12% to 73.73 lakh crore from 65.74 lakh crore in FY 2024-25. Retail participation remained strong, with SIP inflows reaching 3.5 lakh crore for the year, reflecting sustained consistency in retail investments. This growth was delivered amid heightened global volatility, including geopolitical tensions, firm crude prices, persistent FII outflows, and tariff-related trade frictions the US.

In FY 2025-26, investor flows exhibited a clear rebalancing trend, with allocations moderating from pure equity into allocation-oriented and commodity-linked strategies in response to market volatility. Within equities, Flexi Cap, Hybrid, and Asset categories emerged as key beneficiaries of this shift (source: AMFI)

Economic Overview: Global Economy:

FY 2025-26 unfolded amid sustained global uncertainty driven by geopolitical tensions, evolving policy dynamics and trade frictions, with tariff-related measures under U.S. President Donald Trump impacting global trade flows and triggering a safety, supporting a rally in gold and silver amid elevated yield. The West Asia conflict further added to volatility through crude spikes and supply disruptions, weighing on global growth and financial markets.

The U.S. economy remained resilient in FY 2025-26, supported by AI-led investments, strong corporate earnings and steady domestic demand, even as growth moderated amid tariff-related uncertainties and the West Asia conflict. Inflation towards year-end, prompting the Federal Reserve to pause its easing cycle following 100 basis points of interest rate cuts through late 2025, though the overall macro backdrop stayed broadly stable.

In Europe, growth remained subdued, reflecting modest economic momentum despite easing inflation and lower rates. Increased defense spending across the region provided some support, while weak industrial activity and headwinds from U.S. trade tariffs on EU imports continued to weigh on the outlook.

Japans economy remained resilient in FY 2025-26 despite U.S. tariff-related uncertainties, supported by ongoing corporate governance reforms, improving shareholder returns and strength in export-oriented sectors, particularly technology and semiconductors; equity markets also benefited from a weaker yen and sustained foreign inflows, driving strong performance.

Chinas economy in FY 2025-26 underwent gradual stabilization, supported by targeted policy measures to revive domestic demand, while resilience in key manufacturing and semiconductor export segments helped cushion external headwinds from global trade tensions and U.S. tariff-related uncertainties; equity markets reflected a measured recovery in with the Shanghai Composite supported by policy-led stability and improving domestic conditions.

Global financial markets remained volatile throughout the year, with tariff-related uncertainties driving a flight to supporting a rally in gold and silver amid elevated risk aversion. Crude oil prices subsequently spiked above $ 100 per barrel during the escalation of West Asia conflicts, while the US dollar index weakened in March amid shifting rate expectations and sentiment.

Overview of Indian Economy:

The Indian economy sustained its growth momentum in FY 2025-26, with real GDP estimated at around 6.5% 7.0%, supported by strong domestic demand, services activity, investment trends and GST 2.0-led efficiency gains, while inflation remained contained. The RBI undertook rate cuts of 100 basis points till December 2025 and paused policy easing from January 2026 amid evolving inflation and global conditions. RBI expects FY 2026-27 GDP growth at 6.9%, reflecting stable domestic macroeconomic resilience.

Headline inflation averaged approximately 2% in FY 2025-26, easing significantly in the latter half of the year following the GST reform, which drove a broad-based moderation in consumer prices. Inflation closed the fiscal year at 3.40% in March 2026, below the RBIs 4% core target and comfortably within its 2-6% tolerance band. Though food and oil price volatility remained the principal upside risks throughout the year.

Indian foreign exchange reserves stood at $ 697 billion as of April 3, 2026, moderating from an all-time high of $ 728 billion recorded in late February, with the drawdown reflecting active RBI intervention to manage currency volatility, though remained robust relative to FY 2024-25 and continued to provide comfortable import cover.

The Indian rupee recorded its worst annual performance in over a decade in FY 2025-26, depreciating against the US dollar to touch record lows past 95. Weighed down by persistent foreign portfolio outflows, steep US tariffs on Indian exports, elevated crude oil prices stemming from geopolitical tensions, even as the RBI intervened selectively through direct dollar sales, bank position limits, and derivatives curbs to contain excessive volatility.

The Union Budget 2026-2027 reaffirmed Indias fiscal consolidation path, targeting a deficit of 4.3% of GDP and a to-GDP ratio of 55.6%, with public capital expenditure scaled up to 12.2 lakh crore. The Budgets economic strategy centered on investment-led growth, with focused emphasis on manufacturing, infrastructure, urban development, and emerging sectors such as biopharmaceuticals and semiconductors, anchored within the long-term Viksit Bharat vision( Source RBI, MOSPI, Union Budget Documents)

Equity Market Performance:

Global equities navigated a volatile macro backdrop in FY 2025-26, marked by tariff uncertainties and geopolitical tensions, the West Asia conflict; notwithstanding these headwinds, the S&P 500 (+16.3%) and NASDAQ Composite (+23%) delivered robust returns, underpinned by resilient corporate earnings, sustained momentum in large-cap technology, and accelerating investments in AI-led innovation.

European markets exhibited a more measured trajectory, with the DAX (+2.3%) and CAC 40 (+0.3%) constrained by weak industrial output, elevated energy costs, tariff overhang and subdued growth, while the FTSE 100 (+18.6%) remained relatively resilient, supported by its higher exposure towards global commodity and energy sectors.

Asian equities outperformed, led by South Koreas KOSPI (+104%) driven by a strong semiconductor upcycle, AI-led demand and earnings upgrades in technology majors; Japans Nikkei 225 (+49.4%) gained on corporate governance reforms, improved shareholder returns and export-led earnings momentum, while the Shanghai Composite (+16.7%) saw moderate gains supported by selective policy stimulus and stabilizing domestic demand.

Indias Nifty 50 (-5.1%) witnessed a moderate decline in FY 2025-26, entering a phase of consolidation following the strong prior rally, characterized by profit booking, sustained FII outflows (exceeding 1 lakh crore) and external pressures from global actions; a weaker rupee against the US dollar, elevated crude oil prices and rising bond yields further weighed on sentiment, while global capital gravitated towards AI-led opportunities in developed markets. Broader markets exhibited mixed trends, with mid-caps (+1.9%) showing relative resilience, while small caps (-5.5%) corrected more sharply amid stretched valuations and tighter liquidity conditions.

Nifty 50	Nikkei 225	S&P 500	NASDAQ	Shanghai Composite	DAX	FTSE 100	CAC 40	KOSPI
-5.1%	49.4%	16.3%	23%	16.7%	2.3%	18.6%	0.3%	104%
(Source Investing.com)
Performance of the Sectorial Indices in FY 2025-26
Nifty Auto	Nifty Financial Services	Nifty Consumer Durable	Nifty PSU Banks	Nifty FMCG	Nifty Pharma	Nifty IT	Nifty Metal	Nifty Energy	Nifty Media
11.6%	-6.2%	-7%	25.7%	-15%	8.6%	-21.2%	22.5%	4%	-14.5%

FY 2025-26 saw sharp divergence, with PSU Banks (+25.7%) and Metals (+22.5%) leading, while Auto (+11.6%) also posted healthy gains. On the downside, IT (-21.2%), FMCG Index (-15%) and Media (-14.5%) were the key laggards, reflecting weak global and consumption trends (Source NSE)

Debt & Commodity Performance:

The Indian debt market in FY 2025-26 was defined by a transition from a Goldilocks phase of stable yields to a period of heightened volatility and rising borrowing costs. While the market benefited from global index inclusion and robust domestic growth, fiscal supply pressures and geopolitical shocks late in the year pushed yields to nearly two-year highs.

Yields on the benchmark 10-year G-Sec remained largely range-bound for much of the year before hardening significantly in the final quarter as the 10-Year Benchmark Yield oscillated between 6.60% and 6.70% for most of the year. However, it rose to 6.78% following the Union Budget 2026 announcement and peaked at 7.03% by March 2026 due to oil price spikes with the yield curve hardening across the curve by year-end, despite prior repo rate cuts as markets faced significant supply from a record gross market borrowing target of 17.2 lakh crore for the next fiscal (FY 2026-27), which dampened debt market sentiment. Following a 100-bps reduction earlier in the cycle, the repo rate was held steady at 5.25% by early 2026 while the RBI maintained surplus system liquidity, supported by CRR cuts, open market operations (OMOs) and FX swaps. India maintained its status as the worlds fastest-growing major economy, supported by fiscal discipline and resilient domestic demand with the real GDP for FY 2025-26 estimated at 7.6%, driven by a double engine of consumption and investment. The government successfully met its glide path target, achieving a deficit of 4.4% of GDP in the revised estimates for FY 2025-26.

Headline inflation witnessed a marked easing, averaging 2% during the year, though food and oil price volatility remained risks. Indian forex reserves hit an all-time high of $ 728 billion in late February 2026, subsequently settling around $ 697 billion by April 3, 2026, after fluctuations due to RBI intervention.

While oil price remained largely benign through most of FY 2025-26, they spiked above $ 100 per barrel in March 2026 following the escalation of the West Asia conflict, with the Strait of Hormuz, a critical passage point remaining shut. Heightened in the Middle East and ongoing trade conflicts including US tariff announcements and continued central bank purchases in to diversify their assets away from dollar continued to support gold prices during FY 2025-26 as the prices rallied to above $ 5000 troy ounce.

Globally, FY 2025-26 was a year of intense uncertainty, marked by major geo-political conflicts and imposition of tough U reciprocal tariffs on economic partners. Together, these developments clouded the outlook for the global economy. However, the US economy continued to exhibit exceptionalism despite headwinds from government shutdowns and macro uncertainty caused by tariffs due to AI/tech related capex.

Outlook: Looking ahead, despite heightened global uncertainty, the medium-term outlook for Indian fixed income remains optimistic, considering that the markets have priced in most of the negatives. Expectation of lower oil prices, ample liquidity and balanced supply-demand dynamics for government securities provide meaningful support. With growth risks tilted modestly to the downside and inflation expected to remain broadly well behaved, RBI may remain on pause on the rate front.

Mutual Fund Industry as it was in FY 2025-26:

? Assets under Management (AUM) of Indian Mutual Fund Industry as on March 31, 2026 stood at 73.73 lakh crores.

? The cumulative SIP contributions for FY 2025-26 stood at 3,49,589 crores.

? The MF Industrys AUM has grown from 12.33 lakh crores as on March 31, 2016 to 73.73 lakh crores as on March 31, 2026, more than a 6-fold increase in a decade.

? The total number of accounts (or folios as per mutual fund parlance) as at March 31, 2026 stood at 27.39 crores.

? Mutual Fund Industry- Steps taken by the Regulators in FY 2025-26:

There were some important changes in the regulation pertaining to the mutual fund industry during FY 2025-26; the highlights of some of the changes are as given below:

? Additional incentives to distributors for onboarding new individual investors from B-30 cities and women investors.

SEBI vide circular w.r.t Additional incentives to distributors for onboarding new individual investors from B-30 cities women investors, has revised the previous incentive framework for B-30 cities due to concerns of misuse. A new, targeted incentive structure is introduced to encourage distributors to onboard new individual investors from B-30 cities and new women investors from all cities (both T-30 and B-30).

New investments / inflows eligible for the additional commission:

New individual investors (with a new PAN) from B-30 cities.

New women individual investors (with a new PAN) from any city (T-30 and B-30).

Incentive Structure:

Additional commission shall be paid to distributors for onboarding eligible new investors, subject to the conditions specified above.

Investment Mode	Commission Structure
Lump Sum Investment	1% of the amount of the first application subject to a maximum of 2,000, provided the investor remains invested for a minimum period of one year.
	Systematic Investment Plan (SIP)1% of the total investment made during the first year, subject to a maximum of 2,000.

This is an additional commission, paid on top of the regular trail commission.

The additional commission must be paid from the existing 2 basis points of daily net assets that AMCs are mandated to set aside for investor education and awareness initiatives, subject to adequate claw back provisions.

Distributors shall be eligible to receive the additional commission for mobilizing investments from new women investors from Top-30 cities and in cases where the commission for new investment from B-30 cities has not been claimed for the same woman investor/ investment. Dual incentives for the same investor/investment is not permitted.

Investment in scheme not eligible for additional commission:

Payment of additional distribution commission in the manner specified above, shall be mandatory for all schemes of a mutual fund, except the following:

Exchange Traded Funds (ETFs)

Domestic Fund of Funds (with >80% AUM in domestic funds)

Short-term debt schemes (Overnight Fund, Liquid Fund, Ultra Short Duration, and Low Duration Fund).

Any change in the offer document, pursuant to the revised incentive structure shall not be considered as a Fundamental Attribute Change.

? SEBI (Mutual Funds) Regulations, 2026

For nearly three decades, the SEBI (Mutual Funds) Regulations, 1996 (MF Regulations, 1996) have formed the foundational regulatory framework for the Indian mutual fund industry. Over the years, several amendments were introduced to address evolving market practices, resulting in a comprehensive and layered regulatory structure.

Through its consultation paper dated October 28, 2025 (MF Consultation Paper), SEBI invited public comments on the proposed revisions to the MF Regulations, 1996. Subsequently, at its meeting held on December 17, 2025, the SEBI Board approved the introduction of the SEBI (Mutual Funds) Regulations, 2026 (MF Regulations, 2026). These regulations were published in the Gazette of India on January 14, 2026, and has come into effect from April 01, 2026.

? Introduction of Voluntary Lock-in / Debit freeze facility to Mutual Fund folios

SEBI vide circular dated March 06, 2026 has introduced a Voluntary Lock-in / Debit freeze facility to Mutual Fund folios.

Key points of the circular are summarized below:

1. SEBI has decided that a voluntary debit freeze facility be introduced for Mutual Fund investors across demat and non-demat (Statement of Account) folios to ensure that no units shall be debited from such folios till the time they are unlocked.

2. The facility shall be implemented through the inter-operable RTA platform MF Central, which was introduced to enhance investor experience in Mutual Fund transactions and service requests.

3. In the first phase, the facility to lock the folio shall be provided by RTAs through the MF Central platform.

4. The facility shall be available only to KYC complied (Registered / Validated) investors having valid Email ID and Mobile number (both mandatory).

5. AMFI has prescribed the detailed process for locking and unlocking of folios and the processes to be followed by different types of investors.

6. AMFI has also prescribed the detailed list of financial and non-financial transactions that shall be allowed during such lock-period.

7. The process of opting for the facility and the impact on transactions during the lock-in period has been disclosed by AMC / RTA on their websites and in the SAI.

? Disclosure of Registered Name and Registration Number on Social Media Platforms dated February 26, 2026

SEBI vide circular dated February 26, 2026 on Ease of Doing Investment (EoDI)- Disclosure of registered name and registration number by SEBI regulated entities and their agents on Social Media Platforms (SMPs) has mandated that all regulated entities and their agents must disclose their SEBI registered name and registration number on social media platforms posting securities market related content.

The disclosure must be provided: o On the home page of social media handles, and o At the beginning of each securities market related content/videos/shorts/post.

Entities having multiple SEBI registrations must provide a weblink on the home page listing all registrations and relevant registration details in each content.

Agents such as distributors must disclose the SEBI registration details of the principal entity along with their own registration details.

For ease of understanding, the following matrix may be referred to:

Applicability	Number of registrations/ associations	Disclosure of registered name and registration number - Home Page	Disclosure of registered name and registration number - In the beginning of the content
All Regulated entities	Single
All Regulated entities	Multiple		Only relevant entity
Agents of Regulated entitiesSingle
Agents of Regulated entitiesMultiple			Only relevant entity

Performance of your Company

The performance of the Company for year ended March 31, 2026 is given in brief below:

Particulars	Year Ended March 31,2026	Year Ended March 31,2025
	(Rs. In lakhs)	(Rs. In lakhs)
Total Income	1,220.29	675.46
Total Expenditure	3,240.55	2,313.41
Profit/(Loss) before Tax	(2,020.26)	(1,637.95)
Tax Provision for the Year	10.72	13.27
Profit/(Loss) brought forward from previous year	(3,759.27)	(2,103.60)
Profit/(Loss) carried to Balance Sheet	(5,773.58)	(3,759.27)

During the financial year 2025-26, the Companys total income increased by 80.66% to 1220.29 lakhs as compared to 675.46 lakhs in 2024-25. However, since the Company is still in expansion mode investing in infrastructure & resources to augment future business revenue, loss before tax increased by 23.34% to 2,020.26 lakhs in 2025-26, as compared to 1637.95 lakhs in 2024-25. AUM of Shriram Mutual Fund has increased by 27.71% from 895.72 crores as at March 31, 2025 to 1,143.88 crores as at March 31, 2026 and corresponding Management Fees increased from 196.87 lakhs in FY 2024-25 to 295.17 lakhs in FY 2025-26.

Performance of Schemes of Shriram Mutual Fund:

Shriram Aggressive Hybrid Fund, launched in November 2013, delivered a CAGR of 9.09% since inception, Shriram Flexi Cap Fund, launched in September, 2018, generated a CAGR of 7.91% since inception. Shriram ELSS Tax Saver Fund (ELSS), launched in January 2019, delivered a CAGR of 8.97% since inception. Shriram Balanced Advantage Fund, launched in July 2019, achieved a CAGR of 6.78% since inception. Shriram Overnight Fund, launched in August 2022, returned a CAGR of 6.16% since inception. Shriram Multi Asset Allocation Fund, launched in September 2023, delivered 8.28% since inception. Shriram Nifty 1D Rate Liquid ETF (launched July 2024), which delivered e return of 5.54% since inception.

Shriram Liquid Fund (launched November 2024), which delivered e return of 6.19%. Shriram Multi Sector Rotation Fund (launched in December 2024) delivered a return (24.44%) since inception. (Note: All Returns are based on the regular growth plan.) In addition, one new fund was launched during FY 2025-26:

Shriram Money Market Fund (launched in January 2026), which returned 5.81% (annualised) since launch. (Note: All Returns are based on the regular growth plan.)

Performance of Schemes of Shriram Portfolio Management Services: Discretionary PMS:

Shriram LEAPS launched in February 2025, delivered a TWRR return of 8.38% compared to its benchmark return (Nifty 50 TRI) of (1.51%) since inception. Shriram Future GEMS launched in February 2025, delivered a TWRR return of 30.32% compared to its benchmark return (Nifty 50 TRI) of (1.51%) since inception.

Non-Discretionary PMS:

Shriram Non-Discretionary PMS (Equities) launched in June 2025, which delivered a TWRR return of (9.60%) compared to its benchmark return (Nifty 50 TRI) of (8.97%) since inception.

Shriram Non-Discretionary PMS (Mutual Fund) launched in September 2025, which delivered a TWRR return of (7.15%) compared to its benchmark return (Nifty 50 TRI) of (10.46%) since inception.

Shriram Non-Discretionary PMS (Liquid) launched in November 2025, which delivered a TWRR return of 2.19% since inception.

Digital Initiatives

During FY 2025-26, Shriram AMC focused on deepening digital engagement across investor and distributor journeys, with a strong emphasis on usability, personalization, and scale. Key initiatives are outlined below:

- AI Powered Fund Manager Avatar Videos

AI based fund manager avatar videos were introduced to communicate fund insights and updates in a more engaging format. This approach enables scalable, consistent, and easily consumable communication for investors, improving reach and content effectiveness across digital channels.

- Launch of Smart SOA (Statement of Account)

A dynamic Smart SOA was introduced, with an interactive, link-based experience shared via email after every transaction Investors can now access a more intuitive and readable view of their holdings, improving transparency and reducing dependency on traditional document formats.

- Co-branded Digital Portal for MFDs

A co-branding portal was launched to enable Mutual Fund Distributors (MFDs) to create personalized digital touchpoints for their clients. This allows distributors to share branded content strengthening their identity while improving client engagement and trust.

- Introduction of GSIP without HRMS Dependency

The Group SIP (GSIP) offering was expanded beyond HRMS-integrated environments, allowing a wider set of investors to participate without requiring employer system integration. This significantly increases accessibility and opens up adoption beyond group companies.

- Revamped SIP Cancellation Journey in GSIP

The SIP cancellation process within the GSIP portal was redesigned to make it more intuitive and user-friendly. The updated flow reduces friction, improves clarity for investors, and ensures a smoother experience for managing ongoing investments

- Digital Investor Awareness Programs (IAPs)

Digitally executed IAPs were conducted with a focused thematic approach, including sector rotation strategies and multi-asset allocation program tailored for women investors. These initiatives leveraged digital channels to drive engagement and improve investor understanding.

- Simplified and Revamped Investor Communications

Automated SMS and email communications were redesigned using simpler, more accessible language to improve investor comprehension. This initiative aims to reduce confusion, enhance clarity across touchpoints, and improve overall investor experience.

Risks and concern:

The Risk Management Framework is intended to identify, monitor and manage risks across the business. It provides a structured approach to managing risks at both the AMC and scheme levels, supports strong controls and a sound risk culture, and enables informed decisionmaking. The framework is intended to protect investor interests, ensure regulatory compliance, and support the smooth and transparent functioning of the business.

Internal control system:

The Company has adequate system of internal controls commensurate with its size and level of operations to ensure that all assets of the Company are safeguarded and protected and that transaction of the Company are authorised, recorded and reported correctly, and also to ensure the efficiency of operations, compliance with internal policies and applicable laws and as well as protection of resources. Moreover, the Company continuously upgrades these systems in line with the best available practices. The internal control system is supplemented by internal audits, regular reviews by management and standard policies and guidelines to ensure reliability of financials and all other records to prepare financial statements and other data. The Audit Committee of the Board reviews internal audit reports given along with management comments. The Audit Committee monitors the implementation of suggestions given by the Committee.

Human Resources:

Employee Relations remained cordial throughout the year at all levels. Your Company would like to place its appreciation for all the hard work, dedication and efforts put in by all the employees. As on March 31, 2026, the Company had an employee strength of 104.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along explanations therefor, including:

(i) Debtors Turnover 12.00 (ii) Inventory Turnover - NA (iii) Interest Coverage Ratio - NA (iv) Debt Equity Ratio - NA (v) Operating Profit Margin (%) (163%) (vi) Net Profit Margin (%) (166%)

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof: Return on net worth (13.33%) for FY 2025-26 as compared to (26.21%) for FY 2024-25 since the Company is still in expansion mode investing in infrastructure & resources to augment future business revenue.