Can mutual funds work at 11,500 feet? Nippon India MF is finding out in Ladakh

In a first for the high-altitude region of Ladakh, Nippon India Mutual Fund has opened a branch office in Leh on August 1, becoming the only fund house in the country with an on-ground presence in this remote Union Territory.

Set at an elevation of 11,500 feet, the move marks more than just a business expansion. It’s also a test of whether formal investing, in the form of systematic investment plans (SIPs) and mutual funds, can take root in a market that has so far remained rather untouched by India’s financial inclusion story.

The company currently has around 8,000 investors in the region, but until now, they had to invest from outside the region, often physically couriering forms to Delhi or Mumbai due to lack of local infrastructure or via digital platforms, including the fund house’s own app.

A long road ahead

“This journey won’t be easy,” acknowledged Sandeep Sikka, CEO of Nippon India MF, adding that he expects it to take 3-4 years before they see returns. “(But) this is about national interest. People living here have protected the rest of us for decades. It’s time we create something lasting for them,” he said.

The idea for the branch took root during a boardroom conversation with General Ved Prakash Mallik (Retd), a decorated Kargil war veteran and independent director at Nippon India Mutual Fund, who served in Ladakh in 1962. “That’s when we realised mutual funds have been in India for 61 years, but Ladakh still had no branch. We thought someone has to take the first step,” Sikka recalled.

He acknowledged the unique challenges of the region, from its extreme terrain to a complete absence of trained financial professionals. “We’re starting from zero. The entire branch team is local. We’re training them ourselves,” he said.

It’s exactly this challenge that highlights why the presence in Ladakh matters, said Venkat Chalasani, Chief Executive of AMFI (Association of Mutual Funds in India), who was present at an event, after the launch.

“We often boast about India’s literacy rate being over 80 percent, but our financial literacy stands at just 27 percent. Financial inclusion began with Jan Dhan, but it stalled there. Awareness and education must follow and that’s where efforts like this come in,” he said at the branch launch. He added that he hoped to see more mutual funds following suite.

Growth at a nascent stage

Ladakh’s mutual fund AUM currently stands at just Rs 44 crore (around Rs 10,000 crore in the entire J&K region, including Ladakh), in contrast to the national industry figure of Rs 74 lakh crore, as of June 2025. As of June, 18 percent of the mutual fund industry assets came from B-30 locations. Assets from these cities grew 4 percent in just one month — from Rs 13.28 lakh crore in May to Rs 13.80 lakh crore in June.

In mutual fund terminology, “B30 locations” refer to Indian cities and towns that fall outside the top 30 financial hubs. Still, Ladakh, Sikka said, is “not B-30, this is B-300 and beyond. There’s no precedence, no ready ecosystem. But that’s exactly why we are here.”

To support the rollout, the fund house has launched several long-term initiatives, including a dedicated call centre for defence personnel, local-language investor awareness drives, and NISM-(National Institute of Securities Management)-backed certification training to help build a new base of mutual fund distributors from the local population.

“Chhoti SIP is central to our strategy. But the issue in Ladakh isn’t lack of money,  there’s visible prosperity. What’s missing is awareness and trust in regulated investments. If affordability were the problem, we’d already have 100 percent SIP success. But without education, people often fall into unregulated schemes. Our job is to change that. Real inclusion means going beyond access and it’s about building confidence and helping people invest smartly for the long term,” he explained

According to Chalasani, AMFI has already conducted nine investor awareness programmes in Ladakh and plans to deepen that effort. He noted that ultimately the goal was to help people understand the difference between regulated and unregulated products, and the value of thinking long-term through education.

Starting point

On the first day of operations, the branch received 11 SIP applications, a modest number but the company believes it is  significant for a market with limited exposure to formal investments.

On-ground conversations by Moneycontrol found that many local residents, particularly shopkeepers and traders, had little to no experience with mutual funds or even FDs. Several locals and migrants from regions beyond Jammu and Kashmir relied on traditional savings methods, primarily bank deposits or cash.

While UPI and digital payment systems are widely used for daily transactions, there was evident reluctance to embrace online investment platforms. Residents cited lack of trust, unfamiliarity, and poor access to financial advice.

For example, Padma Namo, who has been selling jewellery in a store opposite to the branch (for over 30 years) in the Leh market, told Moneycontrol that since taking over the store after her husband passed away, she has continued to keep a cash business and remains skeptical about online purchases and had not heard about the concept of mutual funds.  She also spoke about how she is yet to start using UPI as she was concerned about fraud.

Sikka and some local investors believe having a physical presence staffed by trained locals will be key to changing this mindset.

One such believer in the Ladakh MF growth story is Sapl Dorjee, a Leh-based jeweller, who has been investing with Nippon for over 12 years. “I started with Rs 15,000–16,000 per month. Today, it has grown to over Rs 32,000–33,000,” he said.

Dorjee, who has also encouraged his wife and children to invest, believes the new branch will boost trust. “People here still hesitate. We’ve seen scams like Emulant where people lost money. Mutual funds are regulated and that gives confidence,” he said. “Even during last October’s crash, I didn’t withdraw. I had invested around Rs 17 lakh since 2012 and now it’s worth Rs 35 lakh. This is for our old age.”

An employee at a clothing store in the Leh Market (who did not give his name), told Moneycontrol that he had never invested in mutual funds but could consider it because of the branch.

The road ahead

Beyond individual investors, the rollout aims to include families and women through tie-ups with the Army Wives Welfare Association and other community-led groups. There are also plans to expand operations to Kargil and Drass and also move to other border states.