Sahara MF may sell products via parent's sales force

Sahara Mutual Fund (MF) plans to tap the large distribution network of its parent company to sell its mutual fund products, but only after it exhausts the conventional channels used by the rest of the sector.

With a corpus of around Rs 100 crore in its mid-cap fund launched in December last year, the fund now plans to launch an institutional fund and a floater next month. The fund house has an asset base close to Rs 300 crore as of December 31, 2004.

Arindam Ghosh, chief marketing officer with the fund, said, "Right now are using the traditional channels for marketing our products, including corporate agencies, independent financial planners and so on."

It also plans to use the banking channel in a much more innovative way than it has been hitherto used. Ghosh, however, did not elaborate on this.

The idea is to have a low-cost delivery mechanism by having a combination of distribution channels, including a direct sales agents force.

The AMC is planning to exploit the banking channels, as well as the post office channels, "which have a lot of opportunities."

Sahara India Financial Corporation Ltd, the residuary non-banking company, part of the Sahara India Parivar, has around 1,700 branches, though concentrated mostly in the north. Ghosh said that this wide network was a captive base which could always be used by the asset management company at any point of time.

"We just have to pick and choose the centers," he said. Although these centers are offering products which have assured returns and, Ghosh said, selling a product with no assured returns could pose some perception problems.

By the end of May this year, the mutual fund arm proposes to be present in 29 centers in the country and by the end of this year to have around 50 to 75 offices.

Though Sahara started out in the asset management business through an acquisition - First India Mutual Fund - it now proposes to grow through the organic route.