Foreign interest giving Indian MFs much-needed impetus

The Indian mutual fund industry is not clear of challenges, but that's not keeping foreign players at bay, report CNBC-TV18's Mitra joshi and Priyanka Ghosh.

The recent acquisition of Benchmark AMC by Goldman Sachs has surprised some industry players. Not only does it come when the MF industry is going through a tough time, the valuation paid to enter the Gold ETF segment is on the high side. But others see nothing to gawk at. The business is still attractive to players who have deep pockets from the ability to think long term. Says Piyush Surana, CEO, Daiwa AMC,"The business is still attractive to players who have deep pockets from the ability to think long term." This is not the first time foreign players have approached India's Rs 7 lakh crore MF market. In the last two years alone. France's Natixis Global AMC bought 25% in IDFC MF, Daiwa AMC acquired Shinsei AMC, Nomura bought 35% in LIC MF, and T Rowe Price picked up 26% in UTI MF. If market buzz is to be believed, IDFC MF may sell a further stake, and Kotak may be looking for a strategic partner. Dhirendra Kumar, CEO, Value Research feels, "Getting a foreign partner might be useful, they would like to dilute to de-risk themselves, and maybe getting a foreign partner at some point, it becomes relevant, ability to invest abroad and this is a segment, to gain prominence, it could be an important dimesion for the domestic mf industry." Experts see this foreign interest as a positive. At a time when the MF industry is struggling with structural macroeconomic factors, they hope this will give some fresh, much-needed impetus to the industry.