 "Patna catches MFs' fancy")
The district-adoption programme aims to spread financial literacy by making fund houses responsible for this in the districts adopted by them.
Officials at Amfi didn’t disclose the names of the bidders for Patna. They said districts that recorded more than one bid were allocated to the smallest fund house. As such, it is estimated only mid-sized or large asset management companies made bids for Patna, as HSBC MF’s average assets stand at Rs 7,600 crore.
The trend has not gone unnoticed. “What’s all the fuss about Patna?” exclaimed the chief executive officer (CEO) of a mid-sized fund house. Currently, the city is 22nd in terms of assets under management (AUM) and accounts for 0.32 per cent of the sector’s total assets under management. “So, is it Nitish Kumar (Bihar chief minister)’s impact that is proving to be a turning point and making Patna an attractive location or are there are other reasons?” the CEO asked.
Sources said Patna held immense potential, from the point of view of fund houses. “Since it is the capital of the state, it is obvious more fund houses would go for it first, compared to other cities in Bihar. This resulted in overlaps,” said the CEO of an asset management company.
There is sector is also rife with talk the rush for Bihar was aimed at impressing the Securities and Exchange Board of India, which is headed by U K Sinha, an Indian Administrative Services officer from the Bihar cadre. “Nothing can be wilder than this guess. He (Sinha) is not a regulator for a specific state or district. He is for the country as a whole and cannot be impressed with such petty means,” countered a CEO.
An executive said, “Bidding for Patna had its risks. We would have been under focus in case the city had come to us. Why to put your head in the lion’s den?” His fund house refrained from bidding for Patna. According to an official in the know, Amfi received multiple requests for at least 60 locations. Executives say Patna, though not in the list of top 15 cities, is a better marketed and developed city than many in its peer group.
“And, most fund houses might be having branches in the city. So, they are relatively at ease to adopt it,” said the marketing officer of mid-sized fund house.
In the first phase of district allocations, 178 districts across the country have been adopted by 32 asset management companies. Reliance Mutual Fund, India’s second-largest fund house, adopted the most districts (15). UTI MF and HDFC MF adopted 12 each, while SBI MF, Sundaram MF, DSP BlackRock, Franklin Templeton, ICICI Pru, Kotak and IDFC were allocated 10 districts each.