In September, Sebi
had lowered the ceiling on total expense ratio charged by a fund house. This would result in lower income for fund companies.
Chaudhry joined Axis Bank
last month. He has plans of growing Axis Asset Management as well as its broking arm, Axis Direct.
Axis AMC will expand its product range and leverage the parent bank’s distribution channel to improve sales and target better customer segments. Chaudhry said every subsidiary of the bank had its own three-year operating plan.
Axis AMC is a joint venture between the bank and the Schroders group. Axis Bank
has the major stake of 74.99 per cent, while Schroders’ stake is 25 per cent. It posted net profit of Rs 43.01 crore on a total revenue of Rs 752.51 crore in 2017-18. In the previous year (2016-17), its net profit was Rs 56.95 crore on a total revenue of Rs 530.97 crore.
“The performance of the funds is very good, but profitability needs to improve,” said Chaudhry.
He said the AMC was focused on the performance of the funds, and was now becoming more focused on being aggressive.
The AMC will provide a full suite of products, by expanding its equity offerings, and plans to set up an alternative investment fund. It is also working on a strategy to add debt products by leveraging the bank’s wholesale banking relations. While the company might not be able to catch up with the top players, it plans to be in the top five or six, at least on an incremental basis.
“Unless you are in the top three or four, the kind of profit you get is limited since you get a slightly lower quality of customers. They will put a slightly lower volume of transactions through you, so your profitability suffers,” said Chaudhry.