Eyeing investments in digital platform, inorganic growth: Nippon Life AMC

Sundeep Sikka

CEO | Reliance Mutual Fund

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Reliance Nippon Life Asset Management (RNAM) was the first asset management company to get listed on exchanges today.  The share price started off first trade at Rs 297.55 on the National Stock Exchange, a whopping premium of 18 percent over issue price of Rs 252.

The company's Rs 1,540-crore IPO was oversubscribed 81.54 times during October 25-27.

In an exclusive interview to CNBC-TV18 Sundeep Sikka, ED & CEO, Reliance Nippon Life AMC and Kazuhide Toda, Head-Asia Pacific, Nippon Life shared their views on the outlook for the company post the successful IPO.

Happy with the listing response, Sikka said post demonetisation lot of money came into the financial sector which found its way into MF industry, so growth will only improve from the current levels.

The penetration of investors into mutual funds is still low, so there is expectation of that going up significantly, Sikka said.

According to Toda, the Indian Mutual Fund market is much more attractive than that of the Japanese market. The interest rates in India, where government bond yields are around 7 are also much more attractive than Japanese government bond yields at 0.1 percent. The economic growth in India is also good along with low inflation - all these factors bode well for India and so expect more money to come into India from Japan and other countries as well, he added.

Sikka said the majority of money coming into MF industry is through Systematic Investment Plans (SIPs) and the number is growing. So structurally, more money will come into India, he said. Most importantly, it is the retail money that is coming in and so expect it to be more stable.

Talking about the plans for the funds that could come into the company through the IPO, Sikka says it will be used for growth in terms of opening new branches and taking the number from 171 to 500 in 3 years, investing in digital platform, seed capital for Alternate Investment Funds and for any inorganic opportunities that may come.