In catch-up game, LIC Mutual Fund aims to enter big boys club in next 5 years – Times of India

Mumbai: LIC mutual fundAfter missing the development bus in the last three decades of operations, the catch-up bid is on and aims to cross the Rs 1 lakh crore AUM (assets under management) mark in the next five years.
The 43-player mutual fund industry has been growing rapidly over the years, both in terms of AUM and number of folios.
As per the latest Amphi data, the AUM grew by 14 per cent to Rs 37.74 lakh crore in June 2022, while the number of folios increased to 13.55 crore.
Largest player SBI Mutual Fund consolidated its position with a 23.7 per cent rise in AUM to Rs 6.47 lakh crore in the month under review, followed by ICICI Prudential MF with a turnover of Rs 4.65 lakh crore, which has become the long-time market leader. HDFC took the lead. AMC At the third position with Rs 4.15 lakh crore.
Kotak MF moved to the fourth position with an AUM of Rs 2.82 lakh crore, Aditya Birla Sun Life MF moved up to the fifth position with Rs 2.81 lakh crore.
Of the 43 players, the top 10 manage Rs 33.4 lakh crore of industry-wide AUM of Rs 37.74 lakh crore as of June.
Although, LIC Mutual FundDuring its 33-plus-year operation, it was never in terms of AUM, despite being a subsidiary of Japan’s Nomura as a joint venture. LIC The biggest financial superpower of the country.
But the current management is changing that and has unveiled a five-year growth plan in which by FY27, it wants to be in the Rs 1 lakh crore-AUM bracket.
“We have prepared a five-year growth plan. We should grow by 3.5-4x or at least take our AUM above Rs 1 lakh crore by FY27 from where we are now.
TS Ramakrishnan, Managing Director and TS Ramakrishnan said, “Initially, we expect to grow at least 70 per cent in this financial year to touch AUM of Rs 30,000 crore, driven by new fund launches and partially assisted by the upcoming merger of IDBI AMC with us.” Chief Executive Officer told PTI in an interview.
However, the chief acknowledged that increasing the AUM from 3.5x to 4x is a tall order.
He further said that the five-year development plan also includes taking the fund house public with primary share sale in the fifth year or so. “But more needs to be done on this front as it is still only on the drawing board,” he said.
For the current financial year, the fund house is expecting to grow aggressively with three new fund launches – the first launched last month – and to reap the benefits from the merger of IDBI Mutual Fund which will be taken over the next three-four months. should be completed in After regulatory approval.
Optimism is still based on strong fund inflows, which should help raise around Rs 10,000 crore from fresh funds and Rs 3,000 crore from the merger of IDBI AMC, which has all approvals except SEBI.
“IDBI AMC has 20 funds out of which 10 will be retained while the rest will be merged into our existing schemes as SEBI does not allow multiple schemes in the same segment. With the merger we will get 3 lakh more retail customers , which will boost our growth. Now the lower retail base of 5.5 lakhs,” said executive director and business head Nityanand Prabhu.
LIC AMC, which has been stuck with fixed income schemes for a long time, has filed for three new schemes in the debt equity and money market space and now 26 schemes are in operation.
Prabhu said, the current AUM of Rs 17,500 crore is led by Rs 10,000 crore in debt funds, over Rs 5,000 crore in equity funds, which has more than doubled in the last five years and is now around 30 per cent of the total; and Rs 2,700 crore in exchange-traded funds, of which about Rs 1,000 crore is in government securities and state debt.
The aim is to take the fund mix 50:50 when it comes to equity and debt funds, and Ramakrishnan and Prabhu admit they have missed the bus for many years because they have stuck with fixed income schemes and found them underperforming. rated as.
But the company has grown well over the years, especially after foraying into the equity space, and is expected to grow from around 30 per cent AUM share currently to 50 per cent in the next few years. Keyword(15)