Our passive funds’ AUM will rise four-fold by FY26: LIC Mutual Fund’s Ravi Kumar Jha
LIC Mutual Fund plans to increase the assets under management (AUM) of passive funds in its portfolio by over four-fold to Rs 25,000 crore by FY26, its MD and CEO Ravi Kumar Jha tells Vivek Kumar M. Jha also reiterated the fund house’s goal of reaching Rs 1 lakh crore AUM by FY26. The fund house, which is currently in the process of garnering subscriptions for its manufacturing fund, plans to launch a multi-asset allocation fund in the December quarter and a couple of ETFs in the March quarter. Excerpts:
Q. You have a target of Rs 1 lakh crore AUM by FY26. Are you on the path to achieving it? And how big would passive funds be in that?
In FY24, our AUM grew by almost 70% and the industry AUM grew by 34%. In the current year also, we have grown from Rs Rs 27,700 crore to over Rs 35,000 crore. This year we hope to cross Rs 60,000 crore and by the next financial year, we hope to cross Rs 1 lakh crore.
Right now, the AUM of our ETFs/index funds is around Rs 5,500 crore. We will definitely look to it if it crosses Rs 25,000 crore by FY26. We plan to launch 2-3 ETFs going forward.
Q. What next after Rs 1 lakh crore AUM? Do you have plans to list?
Yes, definitely. Once we reach Rs 1 lakh crore in AUM, we will have the advantage of strong earnings. So, we will certainly consider an IPO, as that is our ultimate goal. LIC has also encouraged us to explore the possibility of getting listed at the right time.
Q. You have a strong parentage with LIC. How are you leveraging it at LIC MF?
There is a huge synergy between LIC of India and LIC MF. We are taking the support of the parent. LIC has around 113 division offices in India. Our first aim is to have LIC MF branch offices at all these division centres.
We have been steadily expanding our branch network, particularly in B-30 (beyond the top 30) cities. LIC enjoys strong brand value and trust, but unless we establish physical branches where people can see our signboards, they may not feel comfortable inquiring about and understanding new products. There is a need for personal interaction and advice. We plan to increase the number of branches from 35 to 50 by the end of this financial year.
Q. How does LIC MF’s distribution mix look like right now? How much of it comes from digital?
Our distributor ratio comprises 70% of MFDs (mutual fund distributors) and LIC agents, 17% banks and 13% direct, which includes our website and application. We have already improved our website and application and plan to improve our website further. We are trying to limit the need for multiple clicks or long processes when people land on our website for purchase. Once PAN Card detail is added, other details should get automatically populated.