LIC MF ranking to jump a notch after merger with IDBI MF

livemint.com:

MUMBAI : The integration of the IDBI Mutual Fund schemes with those of LIC MF could push up the ranking of the latter by a notch to 22 after the transfer concludes on 29 July, said a top official of LIC MF. The ranking is by assets under management (AUM). “We should get around ₹3,700 crore of AUM from IDBI MF, which when added to our AUM of upwards of ₹18,400 crore, gives a combined AUM of around ₹22,200 crore, which is dynamic depending on the market movement," said T.

S. Ramakrishnan, MD & CEO of LIC MF AMC. Anti-monopoly regulator Competition Commission of India (CCI) approved LIC MF’s acquisition of 20 schemes of IDBI MF in March.

Ten of the schemes, which are common, will be merged with existing schemes of LIC MF, while the rest will be added taking LIC MF’s total schemes to 38. Some of the schemes to be merged include IDBI Equity Advantage Fund being wedded to LIC MF Tax Plan which will be rechristened LIC MF ELSS. Others to be added include IDBI Dividend Yield Fund, which will be renamed LIC MF Dividend Yield Fund.

Asked about the though process behind the merger, Ramakrishnan said, “The thought process for the merger of twenty schemes basically emerges from the fact that LIC had invested in IDBI Bank with 49% way back in 2019. That had attracted section 7B of Sebi whereby sponsors cannot have more than 10% in two AMCs. So, that was starting point.

We saw some value proposition with AMCs as on date growing organically or inorganically. Now, organic growth is a difficult and time-consuming process, whereas inorganic growth gives you some kind of leverage immediately. We saw that IDBI Bank is the main sponsor of IDBI MF.