IL&FS Mutual Fund launches restructuring

Sujoy Manna

Mumbai, Nov 4: The Infrastructure Leasing & Financial Services (IL&FS)-promoted IL&FS Mutual Fund has initiated a business restructuring plan. As part of its restructuring exercise, the fund recently increased the share capital for IL&FS Asset Management Company (AMC) to Rs 25 crore from Rs 10 crore and strengthened its debt desk.

The company plans to offer new schemes and is opening up offices in other metro cities. The net asset under management is around Rs 300 crore.

Speaking to The Financial Express, IL&FS MF, chief investment officer, fixed income, Mr Ramgopal Kundurthi said: “We have initiated an in-house revamping exercise on all aspects of operation. The recent recapitalisation of the AMC shows long-term commitment of the sponsor towards the business.”

As part of the renewed focus on fixed income business, the AMC has inducted Mr Ramgopal as CIO (fixed income) and also recruited a dealer in the debt desk.

According to IL&FS chief operating officer (COO) NK Sharma: “This recapitalisation would help in expanding the network, branding, widening the product range and increasing awareness of IL&FS mutual fund.”

The fund is also planning to launch new schemes. After the launch of the liquid scheme, the fund is planning to launch three more schemes which include a gilt fund, Fixed Maturity Plan and an Index Fund to be based either on Nifty, or Sensex.

The existing two debt funds — IL&FS bond and Liquid funds — have performed steadily, giving good returns, while controlling the interest risk embedded in the portfolio. Movements in interest rates were utilised for investing in actively traded securities in both government and corporate sectors.

The liquid scheme, a short-term high liquidity fund, has consciously maintained a low duration highly liquid portfolio.

The fund has thus avoided market volatility and provided a healthy and steady risk adjusted return.

With regard to the two equity schemes, the fund has reduced the weightage in the technology sector for the diversified scheme to below 10 per cent and focussed on defensives and companies with strong earning growth prospects.

In the eCom Fund, the fund has increased exposure to old economy stocks to almost 40 per cent as a measure of prudence and risk control.