Tata-Mistry face-off: LIC Mutual Fund on a ‘wait and watch’ mode

KR Srivats New Delhi | Updated on January 27, 2018 Published on November 20, 2016

Not looking to add more equity positions in listed Tata Companies: CMO

LIC Mutual Fund (LICMF) is not looking to add more equity positions in those listed Tata Companies in which it is currently invested in, a top official of the fund house said.

It has decided to adopt the ‘wait and watch approach’ to see how the ongoing dispute between Ratan Tata and Cyrus Mistry pans out in the coming days, Rajesh Patwardhan, Chief Marketing Officer (CMO), LICMF, told BusinessLine here.

“Like our parent (LIC), we are also on a wait-and-watch mode.

We are quite hopeful that gradually the dust will settle down on this (boardroom dispute)," he said.

LIC Mutual Fund is currently invested in few listed Tata Companies including Tata Consultancy Services (TCS). Institutional investors are expected to play a critical role at the Tata Group convened extraordinary general meetings including Tata Steel, Tata Motors and TCS to seek shareholders' nod to oust Mistry and Nusli Wadia.

AUM growth

Meanwhile, LIC Mutual Fund — which is now entirely owned by Indian entities (mainly LIC) — will strive to grow its assets under management (AUM) to ₹30,000 crore by end March 2017 from the current AUM level of ₹20,000 crore, Rajesh said.

The aim will be to take the average AUM (AAUM) to ₹20,000 crore by March 2017 from ₹16,000 crore now.

Out of the expected ₹30,000 crore AUM, at least ₹5,000 crore will be equity-oriented funds, he said. Rajesh, who assumed charge as CMO in February 2016, also said that the current demonetisation will have positive impact on the mutual fund industry and LIC MF also expects to ride on the benefits, which is expected to bolster AUM.

Currently, LIC has a 45 per cent stake in LIC MF. While LIC Housing Finance has 39.3 per cent stake, GIC Housing Finance holds about 11.7 per cent stake.

Financial services major Nomura, which was invested in LIC MF between 2011-16, does not have any equity holding in the fund house.

Rajesh added that LIC MF plans to ride on the goodwill enjoyed by LIC to promote LIC MF's mutual fund products in at least 200 villages this year.

He also said that LIC MF will soon rope in Standard Chartered Bank as its unique payment interface (UPI) partner.

Published on November 20, 2016
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