Date:30/03/2008 URL: http://www.thehindubusinessline.com/2008/03/30/stories/2008033051070500.htm

Back SBI MF, Dhanalakshmi Bank tie up for product distribution

Our Bureau

Kochi, March 29

SBI Mutual Fund has formalised its tie up with the Kerala-based Dhanalakshmi Bank for distribution of its investment products through the bank.

The tie-up would qualitatively enhance SBIMF’s reach in the category of mutual fund investors across the country, especially in the South, said Mr Syed Shahabuddin, Managing Director, SBIMF.

The tie-up with Dhanalakshmi Bank would further enhance the reach of the fund house to investors looking to invest in mutual funds, he added.

Mr Shahabuddin, who was here in connection with MoU signing ceremony, told Business Line that SBIMF is now concentrating more in rural and semi-urban areas with the objective to make the capital market reach countrywide.

Currently, it has four million investors, which would be increased to seven million by the end of next year.

SBIMF, Mr Shahabuddin said, is also encouraging Systematic Investment Plan (SIP) investments by adding 60,000-70,000 people every month in rural areas.

SIP schemes are considered to be an ideal one for working class, as it could fetch a minimum return of 20-25 per cent, he claimed. SBIMF is currently holding 64 funds, majority of which are equity-oriented. Three more new schemes are in the pipeline awaiting approval from the SEBI, he said.

Assets under management

He pointed out that the target of achieving Rs 40,000 crore of assets under management (AUM) by March 31 could not be achieved because of the recent crash in the stock market.

Though the company had achieved Rs 30,000 crore of AUM in December, it had lost around 20 per cent of the assets in January due to the market crash.

At present, the company is managing AUM of Rs 26,000 crore. However, it has set a target of Rs 70,000 crore AUM by next year as the Sensex is expected to go up in the next 2-3 months, he added.

Good network

Referring to Kerala, Mr Shahabuddin said SBIMF is considered to be the leading company in the MF industry in the State with a market share of 30 per cent. The company had developed a good network in the State by appointing district co-ordinators in each district to sell the products.

The fall in the Sensex had also brought down its AUM from Rs 1,010 crore in December last year to Rs 800 crore, he added.