Stock Analysis, IPO, Mutual Funds, Bonds & More

UBI sells 40% in MF arm to Dai-ichi Life

Indian mutual fund industry has come of age making it attractive for global players.

ET Bureau|
Updated: Aug 11, 2017, 08.35 AM IST
ThinkStock Photos
Indian mutual fund industry has come of age making it attractive for global players.
State-run Union Bank of India has signed a deal to sell 40% stake in its mutual fund business to Dai-ichi Life Insurance Company of Japan.

The entry of the Japanese fund with deep pockets will not only raise the prospects of Union Mutual Fund, but also accelerate the competition in an industry which is growing at 32% last fiscal and doubled from July 2014.

"The board has given approval to partner with Dai-ichi. The details are yet to be worked out," said Rajkiran Rai, managing director at Union Bank of India.

Earlier, Union Bank had tied up with KBC Participations Rental SA to form KBC Asset Management Company, where the Belgian firm held 49 per cent in the asset management business. Later, in September 2016, KBC sold its entire stake in mutual fund to Union Bank of India.

Indian mutual fund industry has come of age making it attractive for global players. Japan's Nippon owns a stake in Reliance Asset Management which is poised to get listed on the stock exchanges.Global players like Prudential and Franklin Templeton dominate the industry.

In July, a clutch of funds, based in the US and Singapore picked up a 4.43 per cent stake in Reliance Asset Management for Rs 675 crore.

In terms of assets under management (AUM), Union Mutual Fund is ranked number 30 amongst 42 AMCs, with an average AUM of Rs 3,767 crore at the end of June 2017. The Indian Mutual fund industry has a total AUM of Rs 19.97 lakh crore.

"An asset management company could be valued on the mix of assets it has. Equity assets could fetch you 4-6 per cent, while debt assets could be 1-2 per cent. In addition brand, size, profitability of the AMC could also play a crucial part," says Kaustubh Belapurkar, director of fund research at Morningstar India.

Also Read

Suit the debt MF to your risk appetite

Sebi proposes plugging a loophole in MF transactions

UTI MF, Reliance MF sidepocket exposures to Altico Capital

Small, midcap stocks attractive bets right now: Tata MF

Look for midcap stocks that will turn into largecaps: Sunil Subramaniam, Sundaram MF

Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links

Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service