Strong investment processes and risk-mitigation strategies, distribution engagement beyond just business, and committed shareholders are our top strengths. Our limited size and reach continue to be an area of improvement. While we have chosen the inorganic route of growth to address our AUM size, our recent joint venture with DHFL will help us in improving our reach.
Challenges ahead
Attracting and retaining talent is one of the biggest challenges that lie ahead. Also, as a smaller, relatively newer AMC, raising AUM consistently and meaningfully continues to be a challenge for us. Our acquisition of a top 15 AMC in terms of AUM, which is subject to regulatory approvals, should resolve the issue of scale.
Competition
The Indian market is large enough to accommodate more AMCs. However, most of the business is concentrated with the top five-ten players. It is a difficult and a long proposition for a new entrant to achieve scale. So, some of the smaller players need to gain traction and size before true diversity and competition are possible. After this, real penetration can occur.
Retail reach
We intend to leverage the huge retail network of DHFL, our joint-venture partner. DHFL has an extensive network of over 350 offices, reaching out to customers in the low- and middle-income category.
This article was originally published on December 17, 2015.
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