ICICI Prudential Asset Management Company (AMC) recently received approval from the Employees Provident Fund Organisation (EPFO) to manage a part of the provident funds. Nimesh Shah, chief executive officer and managing director of ICICI Prudential AMC, spoke to Business Standard about the fund house’s plans to grow its business. Excerpts:
You were among the lowest bidders for the EPFO money. How will you manage the business and make it viable with such low fees?
The business of managing the common man’s money is a matter of pride rather than a money-making endeavour. We are confident of meeting the costs. No business would make money on the first day.
Could the EPFO fund management activity grow faster than your existing business?
The two businesses will grow together. It might take a fortnight for the finer aspects to be worked out. We will be transparent in providing the details.
Are the equity schemes facing any redemption pressures, given the bearish market conditions?
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The retail investor has matured considerably in the last six months. There is absolutely no redemption pressure per se. Big market declines are in fact attracting inflows. Investors have become smarter and understand the long-term nature of equity. Many had invested when the markets were at a high, but have still remained invested. However, with the easing business conditions, the inflows have seen a decline.
Has the slowdown affected your expansion plans?
Certainly not. The slowdown has actually helped us to expand aggressively. We have grown from 80 branches in March to 240 branches at present, which is a growth of 200 per cent in the last four months. We are not in the business for the sake of short-term valuations, but rather for the long haul.
Where do you expect additional business to come from, given your aggressive expansion activity? What is the next stage of growth?
We are establishing a presence in various asset classes. We have a real estate fund and plan to launch a bigger fund in the same space.
There are also plans to launch a separate private equity company. Moreover, we handle advisory assignments to manage the assets of overseas clients.
