MC Insider: Debt fund tax fallout, changing MF rules, top executives bonding over food and more

This erstwhile sponsor of a mutual fund business got away in the nick of time. In around April 2022, it had sealed the deal with an East based buyer for the sale of its mutual fund (MF) business. By the end of last year, the acquisition was complete and earlier this year, in 2023, the name of the fund house was officially changed. The deal, around Rs 4,500 crore at nearly 4 percent of the fund house’s assets under management (as at the end of March 2022), was said to be one of the better ones, if not the best deal in the MF industry.

In hindsight now, the original sponsor might be thanking its stars given the sudden turn of events. On March 24, the Lok Sabha passed the amendment to the Finance Bill that abolished the long-term capital gains tax benefits and indexation benefits for debt funds. Fixed income funds have been the strong point with the erstwhile asset throughout its life cycle. In the last three years, nearly 70 percent of the fund house’s assets lie in debt funds. Infact, two decades ago, when the fund house was launched, it only managed debt funds for close to five years. It introduced its first equity fund nearly five years after the fund house was born. Even today, the fund house is much stronger on its debt side. Although the fund house’s fixed income team is among the best in business, there’s no doubt that the new tax situation casts a gloom over the newly-acquired business for the buyer.

Sticking to the mutual fund segment , in January, Moneycontrol first broke the story that that the market regulator is contemplating bringing down the expenses that mutual fund schemes charge to investors. And guess what? Today is SEBI’s Board meeting and in all likelihood we pick up that the key decision to lower expense ratios might just be taken. Remember, in December 2022, the market regulator announced that it had initiated an internal study to re-look at the expenses that fund houses charge unitholders. And now all eyes will be on the fineprint!

The top executives of two airlines, both expats, compete fiercely in air. But both seem to be bonding over some small challenges they are facing in India. Both the heads of these rival airlines are struggling with food in India and were heard exchanging notes about changing multiple cooks to cater to their taste. One said that his chef refused to cook ‘red meat’, the other complained that his chef at home ‘overcook’ his meals and didn’t quite get the concept of serving rare meat. Both are struggling with extreme heat on their platter and the weather! The two gentlemen were also confused why their colleagues shy away from escalating issues and try to resolve them on their own.

There have been whispers on the street in recent weeks that though a firm is mighty keen on listing one of its arms in the insurance sector, the management of the said entity isn't exactly gung-ho about the idea. Why? Because they feel they are not getting the right valuation. With the spotlight on sustenance of margins and cost over runs, it remains to be seen if the gap is bridged and investors say "risk hain toh Ishq hain"!

Here's a quandary! A major allocation of Rs 35,000 crore announced in this year’s Budget, also referred to as “Green Budget”, is still clear as mud. Apparently, neither the government officials nor the companies directly getting affected by the allocation are able to answer what exactly this large sum would be used for. Journalists always call key officials in companies to get clarification on facts and figures. But for once, this time tables have turned as some of the journalists have been asked if they know more! Ouch!

For the first time in the recent political history of Karnataka, the main opposition party Congress, released its first list of 124 candidates for the Assembly elections much before the EC declared the poll schedule.

Surprisingly, there have been no big protests or threats to quit or defect from those who have been denied tickets.
Insiders know that for the first time the Congress seems to have decided tickets solely on the recommendations of its chief election strategist Sunil Kanugolu based on field surveys and other important factors.

Even the likes of Siddaramaiah and DK Shivakumar had to fall in line and the selection was almost unanimous.
Party insiders claim the same pattern will be applied for the remaining 100 seats.

The ruling BJP which always had an upper hand in professional election management is grappling with internal problems and has not been able to decide its candidates.

A top BJP functionary from Karnataka quipped “Sunil was with us for years handling our elections. The only thing Congress got right so far is snatching him from us”.

Recently, a senior marketer was stunned during a pitch meeting for a high decibel sporting property. The reason for his astonishment was the deck that was presented and the full u-turn in it from singing hosannas of the digital medium, as the present and future of consumption, till last edition to now shouting praises of the TV medium to deliver entertainment and engagement for the full family. The startling change in tune prompted the marketer to ask about the before and after pitch presentation deck. In reply all that the executives could do was awkwardly laugh. Clearly, this 'hum saath saath' family TV viewing pitch didn't go down as well as intended.

Legacy ad agencies are in trouble. They are facing threats from their inability to keep up with the fast pace of change, inability to attract the best talent, losing their best talent, legacy baggage, big personalities keeping others from growing, clients' in-house agencies which are attracting GenZers who have no inclination to play and work by outdated rules and suffer egos. They are also facing threats from their own people who have left to start their own creative ventures. A CMO was ruing the slow but steady demise of the ad agency, pointing towards one in particular that has dwindled to a shadow of its former self in a Southern market; while its main office and one big client keep its image as a creative powerhouse intact. But is that real or just for reels?