The Hindu Business Line : `Indian MFs post robust growth; touch Rs 1,40,000 cr'

INDIAN mutual funds posted a phenomenal growth last year mainly due to strong fundamentals in the Indian economy, prompting a leading Indian firm to launch a new equity fund shortly.

Mr T.P. Raman, Managing Director, Sundaram Mutual, told Business Line that India's mutual funds showed excellent growth to touch Rs 1,40,000 crore last year compared to around Rs 60,000 crore the previous year.

Mr Raman, who was in the UAE to highlight the features of a new equity fund - Sundaram India Leadership Fund, SILF - to be launched on May 20, said strong fundamentals leading to the market moving inherently on its own strength had led to the mutual fund market posting very good returns.

The fact that interest rates on deposits and other modes of investment had become less attractive in the past year had also induced more investors to look at mutual funds as a good instrument for investment, he said.

Sundaram Mutual, which has a tie-up with Barjeel Geojit Securities LLC in the UAE since the past two years, had had a very positive response from NRI investors, with clients receiving very good returns on their instruments, said Mr K.V. Shamsudheen, Director, Barjeel Geojit Securities.

Mr Raman indicated Sundaram Mutual had around 2,000 investors from the Gulf, mainly from the UAE. He said the potential for growth in the Gulf was enormous and plans were on to present the firm's products in Muscat and Doha also in association with Barjeel.

Mr Raman pointed out that irrespective of the party, which comes to power after the elections, the economic liberalisation programme would continue and this would augur well for the Indian markets in the coming period. Referring to the new fund to be launched later this month, Mr Raman said that it was the first of its kind in the country.

SILF aimed to achieve capital appreciation by investing in companies that are `leaders' in their respective sectors/ sub-sectors. The fund would be benchmarked against the SNP CNX Nifty.

Sundaram Mutual Fund manages about Rs 2,100 crore in net assets as on May 4, 2004.

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