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Every sponsor comes with different set of values and tradition. While we know that the broader principle of the fund house remains intact, what are the three major changes that this acquisition will bring. Also, what are the values that sets apart Bandhan Group from IDFC?
While both the sponsors have a common value system, this acquisition allows to maintain continuity in our endeavour to make people financially empowered.
Bandhan has been one of the role models of financial inclusion in India through its widespread presence in small cities and towns. Our aim is to channelise household savings from hinterlands to fruitful products like mutual funds.
We also want to focus on catering to large spectrum of customer be it retail, HNIs, institutions and corporates. Also, we will continue to focus on maintaining transparency and imparting knowledge.
Another aspect is giving financial security to people. Today, many people are stressed due to money. The moment you become financially secure, you can do a lot of good things for yourself and society. They say Paisa Har Fasad Ki Jad Hai (Money is the prime cause of problems) but we want to change this narrative to Paisa Har Achchai ki Jad Hai (Money is the prime cause of goodness).
Bandhan Bank has a great banking network especially in B30 cities. How do you plan to leverage this strength to increase your business from small cities and towns?
It’s a great opportunity for us to have the group who has banking network across hinterlands. Bandhan group has done fabulous work in areas where many banks are yet to reach. Today, major part of MF assets comes from T30 cities and some top B30 cities. Through this network, we want to reach out to small counters and increase the penetration of mutual funds in India.
Of late, your fund house has seen a change in the fund management team. While I am certain that your fund house has a well-established process, many MFDs still look at fund managers to deploy funds. How will you ensure that MFDs keep their faith with your fund house despite these changes?
Remember that we are in people’s business and individuals have their own aspirations. Managing equity funds is highly competitive and intense job and everyone deserves a break. But we are very happy to have Manish Gunwani on board at the right time who brings with him a lot of energy with fresh perspective.
Currently, we are strengthening our research capabilities by adding more stocks to our radar. We see a lot of interesting opportunities in the small cap segment.
The second key area would be risk management. While having a strong process takes care of risk management, it has to be evolved over time by integrating learnings throughout the journey.
The fund house has witnessed a marginal decline of 5% in assets over the last one year. What are the three things that you are doing to regain the growth momentum?
The last one-two year was not good for debt funds. The industry saw decline in its debt assets due to volatility in fixed income markets. But we stayed the course and saw a marginal blip. Eventually, our market share has grown.
However, we have seen our equity assets growing. And we did well in terms of long-term growth metrics like no. of new clients, SIP inflows and equity AUM. Overall, we are growing structurally.
Just 20% of the total assets of IDFC MF has come from equity funds. How are you going about increasing your equity assets?
We have been witnessing good traction in equity funds as some of our funds did exceptionally well. In fact, our share has increase to 27% if we include hybrid and passives. Equity flows have co-relation to performance and we are doing well to build a good track record.
What are your three key priorities?
The first is expanding our presence. Last year, we have added 11 new location by opening new branch offices. Every year, we plan to add 15-20 new locations.
Another key area is reducing cost by building digital capabilities. We want to leverage technology to enhance host of business aspects like distribution, fund management, marketing and customer servicing.
Finally, we are focussing on product development and new ideas. Recently, we have launched India’s first international debt ETF FoF, which is a new asset class. We continue to identify such opportunities to address the evolving needs of investors.
There has been talk around doing away with B30 incentive and introducing a fixed cost for bringing new investors. What’s your view on this?
There has been misuse of the B30 norms according to SEBI. And everyone has to work to rectify it. A small group may have breathed the norms but it could impact the entire industry. If SEBI has given us a certain facility, it is our collective responsibly not to misuse it or not let anyone misuse it for the greater good.
One thing that MFDs can to tap Rs.100 lakh crore journey.
In my view, MFDs should keep asking themselves this question – How am I adding value to clients?
MFDs should define their value proposition to their clients so that they know the difference that their MFDs bring to the table.
Many MFDs use combination of models to define their value proposition like offering niche services, having wide geographical presence, offering research and reports and so on.
