The Hindu Business Line : Sundaram Mutual keen on West Asia base to tap NRIs

SUNDARAM Mutual desires to expand its non-resident Indian (NRI) clientele base. It is mulling setting up a second distribution centre in West Asia to reach out to potential customers, the asset management company's Managing Director, Mr T. P. Raman, told Business Line on Tuesday.

Currently, the company has some 5,000 NRI clients. Its mutual fund schemes are sold in West Asia by Barjeel, a Dubai-based company. Mr Raman feels that there is a big potential to tap NRIs in the rest of the region, especially in Kuwait. The company might open an office in West Asia.

The US is also a lucrative market, but the regulatory measures for the distribution of financial products are stringent and, therefore, they increase the cost of distribution, he said. Mr Raman said that Sundaram Mutual collected Rs 367 crore from 42,000 applications for its `SMILE' scheme, a fund that would invest predominantly in small and mid-cap stocks.

Of this, as much as Rs 80 crore came from small towns, which, according to Mr Raman, is unprecedented. The company received applications from places such as Lucknow, Surat, Rajkot, Jodhpur and Dhanbad. Mr Raman takes this as a cue to tap the hidden potential in these markets. "There has been a significant brand pull this time," he said.

Now, Sundaram Mutual is waiting for the appropriate time to launch its next product, Sundaram Star. The scheme will invest only in Indian companies that have a global outlook with significant overseas business. The scheme could hit the market in about a month.

The year so far has been good for equities, Mr Raman said. Assets under management by all asset management companies increased from Rs 1.39 lakh crore to Rs 1.5 lakh crore in the April-December period. Equity funds alone increased to Rs 32,000 crore from Rs 23,000 crore.

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