The Hindu Business Line : Aditya Birla Financial plans to double MF branches to 150

Mumbai, May 25 The Aditya Birla Financial Services group has earmarked Rs. 1,000 crore for the current fiscal, to extend the distribution network and product portfolio of its insurance business.

Seventy four per cent of the amount will be financed by the Aditya Birla group itself, while 26 per cent will be provided by the Canada-based Sun Life, which is partner in the insurance business.

“This is partly to strengthen the infrastructure and partly because the structure of products in insurance is such that you have a ‘new business strain’, so you have to fund that upfront,” said Mr Ajay Srinivasan, Chief Executive of the group.

MF branches

The group is also planning to expand the network of its mutual fund branches to 150 this fiscal from 78 at present; and its distribution business network from 14 branches to 35 as it also plans to foray into the equity broking business.

“Our asset management and distribution management companies are both going to fund the expansion of the distribution network out of their own capital,” said Mr Srinivasan adding raising physical and people side of distribution network infrastructure was Group’s priority at this juncture.

“We are looking at a fairly broad range of products and services,” said Mr Srinivasan adding “in the first phase we built our mutual fund and insurance business; and now are starting to focus on building our private equity, distribution [which will include broking] and NBFC businesses.”

The group’s NBFC has a Rs 1,000-crore balance sheet where it caters to a variety of financing requirements both of individuals as well as corporates.

Broking foray

Very recently, the group also announced its intention to enter the broking business as a part of its distribution business.

“We haven’t started broking but we have announced that we are interested in looking at that business, we are in the process of finalising that plan,” said Mr Srinivasan adding “we will be applying for broking licenses in due course.”

Eyeing PMS

It is also very optimistic about its PMS services.

“That (portfolio management) is the business we are quite optimistic about, because we see that catering to the need of lot of high net worth customers that we deal with.”

I think in India you will see both these businesses growing very rapidly, the mutual funds for the mass market and retail customers and more sophisticated customers looking for different options partly Mutual funds, partly portfolio management as well.

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