Mahindra AMC looks to kick off operations in 3-4 months

MUMBAI: Mahindra Asset Management Company, which has received Sebi's approval for setting up mutual fund business, looks to start operations within the next 3-4 months and will focus on rural and semi-urban markets where its non-bank lender parent Mahindra Finance has a strong presence.

"As we have received Sebi's approval to set up mutual fund business, we will shortly be applying for the individual products and the entire process may take 3-4 months for the company to become operational," Mahindra Finance Managing Director Ramesh Iyer told PTI.

Talking about the amount invested by Mahindra Finance in its newly floated MF arm, Iyer said, "We have already invested the regulatory requirement of Rs 50 crore."

"However, it is basic investment only and let me add here that capital is not going to be any constraint for growth of the MF company," he added.

He made it clear that Mahindra MF is not looking for a foreign partner at the moment.

"We are not looking for any foreign partner at the moment for the MF arm and we are going on our own," Iyer said.

Unlike its peers, Mahindra MF will begin its operations from rural and semi-urban areas where Mahindra Finance already enjoys strong brand presence.

"Strategically, we will be the first fund house which will go to rural and semi-urban markets first and we will take the benefit of Mahindra Finance's existing ecosystem and the brand name," Mahindra MF's newly appointed Managing Director and Chief Executive Ashutosh Bishnoi said.

Mahindra Finance or Mahindra and Mahindra Financial Services, part of the Mahindra Group, is focused on the rural and semi-urban sector.

The company has over 4 million customers and an AUM of USD 6 billion. It is a leading vehicle and tractor financier and also offers fixed deposits and loans to SMEs.

Referring to a recent government report, Bishnoi said the average networth of rural household in the country stands at Rs 10 lakh, which is not a small amount.

The only problem is that they do not invest in liquid assets as they do not understand them, he said.

"Hence, more than selling a product in rural areas, the company's objective will be to tell investors to move away from illiquid assets.

"The company will launch products under all the four major categories, including equity, balanced, fixed income and liquid," he said.