Free Press Journal

MFs pin hopes on SIPs for business growth


Mumbai : Fund houses are pinning their hopes on the Systemic Investment Plans (SIPs) for business growth this fiscal and expect an uptick of up to 20 per cent in overall assets under management.

Total AUM (assets under management) of the industry with 43 players at present is Rs 15 trillion and SIPs valued at Rs 4,000 crore are being added to the industry every month. The industry has added 25 lakh SIPs during past one year alone. In terms of value, SIPs have grown by 33 per cent during past one year alone in terms of value.

SIPs worth Rs 4,000 crore are being added to the industry on a monthly basis currently, from Rs 3,000 crore a year ago. “The MF industry will grow at 20 per cent during the current fiscal and we are relying on SIPs for achieving the target,” D P Singh, executive director and chief marketing officer of SBI Mutual Fund, told PTI here on the sidelines of a Café Mutual event today.  He said SBI MF also expects a similar growth on the back of the increased investor interest in SIPs. With a total AUM of Rs 1.37 trillion, his company is the fifth largest fund house in the country.

“We are hopeful of crossing the AUM of Rs 1.5 trillion from Rs 1.37 trillion at present by the fiscal-end,” Singh added. As of now, SBI MF was having a total of 50 lakh folios which is expected to increase to 55 lakh by the fiscal-end.

The company was having 15 lakh SIPs at present, which was likely to go up to 18 lakh by March. In terms of value, the company was looking at the size of SIP to grow to Rs 400 crore from Rs 370 crore at present, by the fiscal-end, Singh said. “We are trying to reach our investors through our 12,000 distributors which are responsible for 85 per cent of the company’s business,” Singh said, adding, “we are imparting training to distributors telling them how to increase business.” Another fund house Mirae Asset, with current equity AUM at Rs 5,300 crore, has also chalked out an aggressive business growth plan for the current year. The company follows the calendar year as its fiscal year. “We are looking at achieving an equity AUM size of Rs 6,000 crore from current size of Rs 5,300 crore by December,” Mirae Asset chief executive Swarup Mohanty said, reports PTI.

Total folio size of the company is at 2.9 lakh, which includes 90,000 SIPs and it has been doubling its folios per annum for past three years, he said.   “On monthly basis too, the company has been adding Rs 42 crore as of now and we are looking at making it to Rs 50 crore by December,” he said. “We are also looking at increasing the SIP folios to 1.1 lakh from the current size of 90,000 by the year-end,” added Mohanty. Edelweiss AMC with a total AUM of Rs 3,000 crore on a standalone basis, has recently relaunched its Prepaid SIP plan. “We had recently relaunched Prepaid SIP which has picked up now,” Edelweiss AMC chief executive Vikas Sachdeva said.