Growth momentum. ICICI Prudential Pension Funds eyeing ₹1 lakh crore AUM in 5-7 years, says CEO Sumit Mohindra

Riding on the strong growth momentum of last four years, ICICI Prudential Pension Funds Management Company (IPPFM) is now targeting an AUM of ₹1 lakh crore in next five to seven years from about ₹13,500 crore in end September 2022, its CEO Sumit Mohindra has said.

Set up in 2009, the subsidiary of ICICI Pru Life has entered into a first-of-its-kind distribution partnership with PensionBox, India’s first pension app, to offer the National Pension System (NPS) to its customers. 

PensionBox, a digital platform, enables customers to make an in-app purchase of NPS.

Under the partnership, the firms will integrate their digital platforms to offer pension solutions to a cross-section of customers.

“We foresee a big role for fintechs in our strategy. It will give us reach and also provide cost advantage. In next five years, we expect fintechs will contribute 10 per cent of our incremental subscriber base. Partnering fintechs will help expand distribution in Tier-2 and 3 cities as mobile phones are finding good acceptance in these cities now,” Mohindra told businessline. .

IPPFM has been on a strong growth trajectory over the last four years with assets under management (AUM) recording 50 per cent CAGR from ₹2,600 crore to about ₹13,500 crore in end September this year. The company had returned to black (turned profitable) last fiscal and is confident of remaining in profits this fiscal too, said Mohindra. 

Asked if IPPFM would look to raise capital to fund business growth, Mohindra replied in the negative. “We are comfortable on the capital front. We won’t be needing capital from our sponsors this fiscal,” he said.

IPPFM’s partnership with PensionBox will help the former’s customers in making contributions towards NPS and withdraw funds upon maturity from the accumulated retirement corpus through the app.

NPS is the country’s lowest cost retirement planning product which enables customers to systematically build their retirement corpus over the long-term and lead financially-independent golden years, besides offering tax benefits. 

NPS subscribers have the flexibility to choose their asset allocation between the Equity Fund, Government Bond Fund, and Corporate Debt Fund.

Mohindra said the company is in the process of building its own online journey where customers can buy a product.

“Today we don’t have an online journey. We are using the journey that the CRAs are providing,” he said, adding that the company is now working with all the three Central Record Keeping Agencies (CRAs).

Kuldeep Parashar, Founder & CEO, PensionBox, said, “PensionBox was started with a simple vision to improve the way customers plan for their retirement by using technology. We are glad to have ICICI Prudential Pension Funds Management Company as the trusted partner to share our journey of building PensionBox and scaling it up. It is possible to make our nation ready for 2050 when India will have more than 34 crore citizens in the retirement age. We are growing and building PensionBox aggressively and we aim to reach every household in the next 3 years.”

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