ICICI Prudential AMC's Iyengar to join Indiabulls AMC as chief executive

Raghav Iyengar, who had been heading the institutional and retail business at ICICI Prudential Asset Management Company (AMC), has resigned and is slated to join Indiabulls AMC as its chief executive officer (CEO).

 

According to sources, Iyengar will be joining the small-sized fund house by the third week of August. A spokesperson at ICICI AMC said: “Iyengar has chosen to pursue opportunities outside the company and we wish him the very best for his future plans.”

 

Indiabulls AMC said it could not comment on market speculation.

 

Sources add that Akshay Gupta, currently group executive head and CEO at Indiabulls AMC, will be moving to Prime Securities. Gupta also refrained from commenting.

 

Sector insiders suggest some investment decisions taken during Gupta’s tenure did not go down well with the sponsors and this could have led to his ouster.

 

Indiabulls AMC had initiated positions in Fortis Healthcare Holding’s (FHH’s)—then controlled by Shivinder and Malvinder Singh–commercial papers and fixed-rated bonds in May 2016. At the end of FY16, Fortis Healthcare Holding’s debt stood at Rs 50 billion.

At the end of May, the AMC’s exposure to these papers stood at Rs 1 billion, showed data from Value Research. These were rated as investment grade at this point, with the commercial paper rated A1+ and the fixed rate bonds as A. In July 2016, rating agency ICRA had given s negative outlook for FHH’s debt instruments, while keeping the rating for its non-convertible debentures (NCDs) at A- and at A1 for its commercial paper. ICRA said the negative outlook was due to significant increase in total debt.

 

In July 2017 and October 2017, FHH’s debt papers saw further downgrades. The company’s parent, RHC Holdings, had defaulted, failing to pay interest on its Rs 2 billion NCDs by the June 30 deadline. By December 2017, FHH was not sharing its monthly ‘no default statement’ with rating agencies, prompting ICRA to put its ratings under review.

 

While the exact impact of these investments on the fund house could not be ascertained, Indiabulls AMC had exposure of about nine per cent of its assets to debt paper of FHH in its fixed maturity plan. In other schemes, the AMC had started reducing its exposure from June 2016.

 

Iyengar’s appointment is expected to come as a boost for Indiabulls AMC, which has been struggling to increase its assets. The fund house should benefit from Iyengar’s experience of working at one of the largest fund houses, with sharp focus on the retail (meaning individual investors) segment. As of March 2018, the AMC’s assets under management stood at Rs 60 billion. In the past two years, while the sector saw robust growth in assets, those at Indiabulls AMC was more or less stagnant.