The season of revival is gathering momentum. After Escorts, Taurus and BoB Asset Management Companies, Chennai-based First India Mutual Fund is getting its act together with the planned launch of its open-ended debt, liquid and gilt funds. The fund house is yet to decide on the timing of the launch of the three funds christened First India Liquid Fund, First India Income Fund and First India Gilt Fund. First India has been dormant since 1997, when it had launched a closed-end tax saving scheme. The fund house also lacks economies of scale since its only fund -- First India Taxgain '97 manages a small asset base of only Rs 1.86 crore.
With the AMC on the rejuvenation path, the ownership pattern has also undergone a change. While the principal sponsor, First India Leasing has exited the AMC, Investec Asset management Company has brought down its stake. Instead, A C Muthiah is now the main promoter with a 51 per cent stake with Metropolitan Life Insurance Company and Investec AMC owning 34 per cent and 15 per cent, respectively. The AMC has a paid up capital of Rs 10 crore.
Advantage First India
Unlike some of the other mutual funds, which are also attempting to script a revival after years of poor performance, First India has been a virtual non-starter. On the contrary, its only closed-end tax plan has been an impressive performer on the back of a small corpus with a return since launch of 29.51 per cent. In the last one-year though, the fund has returned a negative 39 per cent with a concentrated portfolio of technology stocks while the BSE Sensex has lost 15.4 per cent. Nonetheless, First India will be as good as a recent addition to the Indian fund landscape and is unlikely to face any dissatisfied investors.