We are living in interesting times and it should be India’s decade, says LIC MF’s Ravi Kumar Jha

I am very bullish on the domestic economy. The economy has received lot of support from the government. Public sector companies which were earlier known as ‘temples of modern India’, have regained their importance. They have made good progress, be it expansion and market outreach. Banks are in good shape to fuel growth with NPAs at the lowest level.

The performance linked incentives in select sectors will reduce import dependence. Defence companies, which have bagged huge orders from the government, have to source only a few components only from India. The order book is overflowing for most companies. T

The government is focusing on solar and renewable energy to bring down operational cost and encourage many companies to set solar components plant. The pool of listed companies are also increasing with listing of more start-ups amid a buoyant primary market. I believe we are living in an interesting time and it should be the decade of India.

India is aiming to be the third largest economy with all the ingredients in place and this is the right time for people to consider mutual fund investment. The industry has already crossed the ₹50 trillion-mark. In December 2022, it was at about ₹40 lakh crore and in one year it has touched ₹53 lakh crore. If the momentum remains, the industry can easily touch ₹100 lakh crore in 4-5 years. The SIP book was at ₹3,100 crore in April 2016 and it has touched ₹18,838 crore in January. This reflects the maturity of investors. It gives good compounding returns. As the mutual fund penetration improves, people who are earning about ₹10,000 a month should invest at least ₹1,000 a month as it will help him/her in times of difficulty.

We are a 35-year-old fund house, but I agree that we have not achieved the desired scale. We are targeting to close this fiscal with an asset under management of ₹35,000 crore and touch ₹50,000 crore by March, 2025. We see a lot of opportunities in passive funds. We have seven passive funds. We have unique Nifty 8-13 year Gsec fund which crossed an AUM of ₹2,000 crore. In beginning of this fiscal, we had an ETF asset of ₹3,300 crore and it has touched ₹5,000 crore. Our target is to cross at least ₹10,000 crore in the next financial year. We are planning to launch more ETFs depending on feedback from LIC and investors. This segment has been big in the US and suddenly there is more talk about it in India. We want to scale it up.

Currently, we have about 35 branches and over 50 business centres, but these branches are less in comparison to what we should have. In fact, LIC has 113 divisional offices at major capital cities. We have made a plan to open at least one branch at these divisional centres and cross 50 branches by March, 2025. In the next five years we will have over 100 branches. Having physical branches are extremely important. The physical branches will also conduct training sessions for potential distributors. We have empanelled 55,000 distributors with us. We are getting good support from LIC. We teach them to pass exams for MF distributors.

There is always risk and challenges in equity investment. The government is taking a lot of steps to build relationship with neighbouring countries. However, there will always be unknown risks. Nevertheless, the India economy is resilient and the purchasing power of people is growing. Every month 4 million demat accouts are being opened. The number of demat accounts has gone up to 140 million from about 40 million a few years back. So domestic investors are very bullish. Domestic institutional investors are growing in size. In fact, the relevance of FPIs is coming down significantly and it will become meaningless to look at FPI investment data.