The Hindu Business Line : BNP keen to do asset management business in India

BNP, the French financial powerhouse, has again shown an interest in doing business in the Indian asset management sector, taking up from where it gave up last time.

What has prompted BNP is the fact that a few other funds, including Fidelity and Societe-Generale, have forayed into the Indian market, albeit in different forms, while some others (like UBS) are known to be exploring the possibility of establishing their presence in India.

BNP is beginning a preliminary effort to familiarise itself with the latest local conditions. The fact that there are major changes in the horizon - like the possible introduction of commodity funds - are also been seen as positive factors.

In July, Societe Generale (SocGen) had announced its strategic tie-up with SBI Mutual Fund, courtesy the sale of 37 per cent stake in SBI MF by State Bank of India, its promoter, for over $35 million.

Players like BNP are said to play a major role in European markets, especially in France where significant savings are done through the mutual funds route. This, incidentally, still does not compare with Sweden, where savers are particularly serious about these vehicles. BNP is also a force to reckon with when it comes to distribution of mutual funds.

BNP, according to Mr A.P. Kurian, Chairman of AMFI, had earlier looked at the Indian market and decided not to put up a venture. "They did not want to begin investing in India then. Now, there has been a re-think," he added.

This time, however, the dynamics seem to be different, mostly because of the interest shown by the likes of Fidelity. The latter is set to start its operations locally, initially with a diversified growth fund and branching out with other products subsequently.

The Indian MF sector, Mr Kurian mentioned, has actually seen a reduction in the number of players in recent years - a result of the consolidation that has been taking place. The fund houses that have exited or otherwise quit the scene include Kothari Pioneer, Zurich, SUN F&C and IL&FS. Alliance Capital, whose schemes will soon migrate to Birla Sun Life, has recently joined this list.