The Hindu Business Line : `We are considering ways of enlarging asset base'

The MF is looking at a situation where it can attract more `sticky' money, courtesy investors who do not go away every time the market gets a jolt. This implies that it has to focus on building equity assets in a serious manner.

"We would prefer equity funds to debt any day... it would be an ideal way of moving ahead", Mr T.P. Raman, Managing Director, tells Business Line.

Excerpts:

What is the size of your equity assets now?

It is about Rs 300 crore at this juncture and we are perpetually considering ways of enlarging this base.

It is possible to do so provided the market remains attractive enough for investors and the right equity products are kept in place. Our efforts to do the latter are reflected in two recent offers, Select Midcap and Select Focus. And now certain other ideas are being weighed and hopefully a few of these would be translated into new schemes.

We have a range of debt products already, some of which were launched not long ago. For the moment we may not consider adding anything major to what we have on that front.

On the whole, we are trying to convey the simple message that equity, which can well be risky in the short term, can also be an excellent asset class for those who are prepared to wait longer. This message has to go to the grassroots, the small investor who worries continuously about his money.

Where could new business originate from?

An entry into the relatively smaller centres would be a good idea, especially if we are attuned to the distribution systems that exist in those areas. Jaipur, with its growth potential, is an example. Elsewhere, there is need to create innovative marketing strategies in order to attract new sets of investors.

It's important to remember that investors' needs are bound to change frequently. There will be new situations, which must be dealt with efficiently. The market is aware that returns from debt have slowed down and this should turn it towards equity even more. But investors would first want reliable ideas, based on which they will allocate their surplus.

You had mooted a fund for small-cap companies. What's the latest development there?

We are taking a fresh look at the proposal, partly because NSE has revised its definition of `mid-cap' stocks. This is a recent move by the exchange. However, it would in a way limit our universe of small-cap companies that are worth investing in. We would now have to see how best we can come up with a practical solution.

The original plan, which was sent to SEBI for clearance, was designed with a view to identify promising small-cap names, ones that are capable of growing bigger and better with time. The idea, which would have been translated into the first scheme of its kind in the asset management industry, was to invest predominantly in these outfits with limited room for larger companies.

Let me mention here that investors have already seen the performance of Select Midcap, which is run as a diversified scheme with CNX Midcap 200 as its benchmark. It has given well over 100 per cent since inception.

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`We are considering ways of enlarging asset base'