The mutual fund (MF) industry is gearing up to tap potential retail investors in tier II and tier III cities and is also strengthening its information technology (IT) networks to take advantage of the market regulator Securities and Exchange Board of India (Sebi)?s proposed new regulation pertaining to waiving of the entry load for direct participants including the Internet.
The Union finance minister P Chidambaram?s caution to retail investors while investing in the market directly, as the indices are already trading at the high level of above 17,000 mark, and his indirect suggestion for them to participate in the equity market through the MF route have come as a shot in the arm for MFs. This has encouraged fund houses to pursue their expansion operations firmly.
The fund houses have also decided to beef up their IT operations to take advantage of the Sebi?s proposed new norms to waive entry load for the direct investors including the participants through the net.
Explaining Reliance Mutual Fund (RMF)?s future plan, Vikrant Gugnani, president, Reliance MF, said that the fund house presently has 310 branches which would be enhanced to 500 branches by March, 2008, 1,000 branches by March, 2009 and 3,000 branches by March, 2010. ?Our main focus is the retail investors of B & C class cities. We would encourage them to invest in Systematic Investment Plan (SIP) having a ticket size of as moderate as Rs 2,000 and Rs 5,000,? he said.
In the context of FM statement, Gugnani said that there are new challenges and opportunities before the MF industry. The fund houses aims to target retail investors as they are the long-term investors.
With reference to Sebi?s new norm, he said that the fund house has the facility for the investors participation in the various schemes through net. ?Presently, the share of the online investment in the various schemes is 8% out of the total resource mobilisation. We have a detailed internet strategy in place which would be unveiled in due course of time to further strengthen our net services for the retail investors?.
In line with Reliance MF, Birla Sun Life MF too has chalked out its expansion plan. According Raghvendra Nath, vice president, Birla Sun Life Mutual Fund the fund houses plans to increase its branch offices from present 50 branches to 65 branches by the end of the current financial year. Most of these branches will be opened in the B & C class cities. The fund house is also involved in the investors education.