ETFs were unheard of in India before Benchmark AMC launched its operations in 2001. Around 1998, two finance professionals with an entrepreneurial streak—Sanjiv Shah and Rajan Mehta—came up with the idea of bringing ETFs to India. While Shah was employed at DSP Merrill Lynch, Mumbai, and headed their debt and equity sales desk, Rajan was based in London and was with Merrill Lynch’s wealth management division. In 2001, Shah collaborated with Niche Financial Services, a non-banking financial company which agreed to be the fund house’s sponsor; Mehta joined around August 2001.
With a capital of Rs. 10 crore (the minimum requirement as per the guidelines of the capital markets regulator, Securities and Exchange Board of India), Benchmark AMC hit the markets with its first offering, an ETF called Benchmark Nifty BeES. Their mission: to launch only passively-managed funds, and specifically ETFs; stay away from paying high commissions to agents; keep fund costs low and pass on the benefits to investors. It launched India’s first ETF, Nifty BeES, in December 2001.
After launching ETFs on basic indices such as the Nifty and the Nifty Junior, Shah and Mehta strived to launch ETFs on different asset baskets. For instance, Benchmark AMC was the first fund house in the world to conceive the idea of launching a gold ETF and filed its draft offer document with Sebi, way back in May 2002. But in the absence of norms for gold ETFs back then, Benchmark’s draft offer document remained in cold storage till former finance minister P. Chidambaram announced in his 2005 budget speech the government’s intention to allow gold ETFs. Benchmark later got the nod and launched its gold ETF in February 2007. In the meantime, the idea of gold ETFs had spread and the world’s first gold ETF got launched in 2003 in Australia.
With a capital of Rs. 10 crore (the minimum requirement as per the guidelines of the capital markets regulator, Securities and Exchange Board of India), Benchmark AMC hit the markets with its first offering, an ETF called Benchmark Nifty BeES. Their mission: to launch only passively-managed funds, and specifically ETFs; stay away from paying high commissions to agents; keep fund costs low and pass on the benefits to investors. It launched India’s first ETF, Nifty BeES, in December 2001.
After launching ETFs on basic indices such as the Nifty and the Nifty Junior, Shah and Mehta strived to launch ETFs on different asset baskets. For instance, Benchmark AMC was the first fund house in the world to conceive the idea of launching a gold ETF and filed its draft offer document with Sebi, way back in May 2002. But in the absence of norms for gold ETFs back then, Benchmark’s draft offer document remained in cold storage till former finance minister P. Chidambaram announced in his 2005 budget speech the government’s intention to allow gold ETFs. Benchmark later got the nod and launched its gold ETF in February 2007. In the meantime, the idea of gold ETFs had spread and the world’s first gold ETF got launched in 2003 in Australia.