LIC MF to grow share of equity AUM to its total business; focus on drawing more retail participation

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Kolkata, May 12 LIC Joint Fund (LICMF), which hopes to complete the proposal Merger with IDBI Investment Fund By the first half of this fiscal year, it is looking to increase the share of AUM (assets under management) of its total business to approximately 50 percent in the short to medium term. It is also looking forward to growing its SIP (Systematic Investment Plan) portfolio by attracting more retail investors by intensifying its distributor network.

At the end of 2022-23, the assets under management of LICMF were approximately Rs. 17,600 crore. Equity accounted for about 45 per cent of the total assets under management at approximately Rs. 8,000 crore while the remaining Rs. 9,600 crore came from debt schemes.

According to TS Ramakrishnan, Managing Director and CEO of LICMF, SIP’s share of total assets under management is close to 13 percent at the moment. This is relatively lower compared to the industry average of about 15-16 percent (SIP’s share of the indutry’s total assets under management).

“Right now, we are in the growth phase in terms of strategic investment programs and we hope to be able to catch up with the industry level in terms of SIPs share of total assets under management within two to three years,” said Ramakrishnan. business line.

LICMF has about 45,000 distributors, of whom more than 50 percent are LIC agents. The number of active distributors out of the total will only be around 7,000 for now.

“While we attach importance to hiring LIC agents as our distributors, at the same time we are also interested in supplying other distributors who only sell mutual funds,” he said.

While the company will attempt to leverage parent LIC’s massive distribution network to grow its business and its footprint, efforts are also ongoing to increase the number of its distributors who are not LIC agents. It hopes to bring the share of active distributors closer to 45,000 in the next eight to 10 years.

merger

Speaking about the proposed merger, he said, Indian Competition Commission (CCI) approved its acquisition of IDBI Investment Fund in March this year. It is awaiting further clarifications (regarding the proposed merger) from the regulator. The total assets under management of IDBI MF was less than Rs 4,000 crore at the end of FY23.

“We are awaiting further clarification (regarding the proposed merger) from the regulator. We will have to provide a one month exit notice to investors. We see the merger completed sometime which could be at the end of June or July, if all goes well. So, we hope that That happens by the first half of the current fiscal year.

Once the acquisition is complete, the publicly identifiable schemes will be merged.

“Wherever we have gaps (in the product portfolio), those gaps will be filled in with some products that IDBI MF will have. Schemas that can be defined publicly will be merged. IDBI MF should have some schemas that we don’t have, and we will run them as standalone schemas.” .

market share

LIC MF’s market share is less than 0.5 percent of the industry’s total assets under management. It aims to raise it to 1 percent in the next five to 10 years. The company hopes to touch assets under management of Rs. 27,000 crore by the end of this financial year.