IDBI Mutual to go more retail for profitable growth

K. R. Srivats New Delhi | Updated on June 19, 2013

Eyes 3 lakh customer folios in next 2 years

IDBI Mutual Fund will launch a slew of products this year as part of its larger strategy to become a more retail oriented fund house, a top official has said.

In the next few months, this fund house will launch a couple of accrual based debt products, Debasish Mallick, Managing Director & Chief Executive Officer, IDBI Asset Management Ltd told Businessline here.

Accrual based products are those where returns come from interest accruals on corporate debt paper. The fund house will have to take a credit call on the corporates.

Better corporates give higher returns. Accrual debt products are in variance to duration products which are more dependent on central bank’s policy rates.

Besides accrual debt products, one or two equity products (including hybrids) will also be launched this year, Mallick said.

IDBI Mutual Fund is aspiring to grow the number of its customer folios from the current level of 1.25 lakh to 3 lakh folios in next 2 years.

As on date, IDBI Mutual Fund has 8 products and another 4-5 products are on the anvil this year.

A recent entrant to the mutual funds industry, IDBI Mutual Fund had an AUM of Rs 6,500 crore as at end March 2013. Of the AUM size of Rs 6,500 crore, the debt funds account for about Rs 5,500 crore, signalling that IDBI Mutual Fund is more a debt player.

The fund house is looking to achieve operational break even by March 2015.

IDBI Mutual Fund will not chase assets under management (AUM), but will go in for profitable growth which is essentially retail growth, Mallick added.

"Despite the markets being bad, we hope to introduce more products. We always would remain in the reckoning. We are taking it as a journey that would necessarily involve retail.

If we were to involve retail, we have to bring products that made sense to them. As a result, we cannot wait for the boom time to come", Mallick said.

He also said that IDBI Mutual Fund will not tread the path of few fund houses that are running on negative margins just to grow the AUMs.

Published on June 19, 2013

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