With over ₹ 7,500 crore worth of monthly inflows in an industry with assets worth ₹ 23 trillion, the Indian mutual fund industry seems like a juggernaut. It’s hard to imagine that the seeds of India’s ₹ 23 trillion mutual fund industry were planted over drinks and dinner in the lawns of a plush bungalow in Nungambakkam, Chennai.
It was 1992. The Indian economy had just been opened up. The Narasimha Rao government allowed private sector into the mutual fund industry in its historic Union budget of 1991-92. Before this, all fund houses were sponsored by state-owned firms, with the Unit Trust of India being an overwhelming market leader. It was in this setting in Chennai, Vivek Reddy—who had just returned from the US after his education and a small stint in a consultancy firm —got together with his childhood friend Shyam Kothari and convinced him to open a mutual fund.
