Mumbai: India’s Taurus Asset Management plans to more than triple headcount and branches in FY09 to reverse a slide in its market share and compete in the surging domestic mutual fund industry, a top executive said on 5 May.
Taurus will add at least 130 people to its existing staff of around 50, doubling investment management team to 12, and expand presence to 24 cities from seven now by March, its new chief executive Waqar Naqvi told Reuters in an interview.
The firm will also offer employee share options to retain talent in an industry where analysts say soaring pay and poaching have delayed entry of new players, hurt profit margins and put the future of smaller firms like Taurus in jeopardy.
“We want to do everything required to grow our business,” Naqvi, who has joined Taurus with his former Birla Sun Life Asset Management colleagues Sanjay Parikh and Amit Gupta, said.
“We have the platform, we have the budget, we have the people and a lot more people are set to join us,” he said, adding the firm had hired heads for accounts, marketing, technology and operations. A new fund manager will join by July.
Taurus, one of the bottom five players by assets, managed Rs3.2 billion at March-end. Its market share fell to 0.06% from 0.11% three years back, data from the Association of Mutual Funds in India (Amfi) and Icra showed.
Indian fund assets have more than tripled to Rs5.1 trillion during the period as compared with 8.5% rise in the collective assets of the smallest five players.
“It is not a case of bigger guys beating the smaller guys. I think smaller funds are not doing much to compete,” Naqvi said. “They should increase their reach. They should be prepared to run in a loss budget of three four years.”
Naqvi said India’s fund industry would grow by 40-50% annually over the next five to seven years and there was enough room for everyone to survive.
Global players such as American International Group and JP Morgan entered the industry last year while UBS and Shinsei Bank are among more than 20 waiting in the wings to join the 33-member industry.
Taurus manages five equity and three debt funds and does not plan to significantly expand its product basket, Naqvi said. The funds were doing well and the firm would promote them, he added.
The firm’s stock funds have risen an average 40.9% in the last 12 months and all but one have outperformed the 25.02% growth in India’s benchmark stock index during the period, data from fund tracking firm Icra showed.
But the returns have come at higher risk, Suraj Saraf, senior analyst at Icra, said.
“A smaller fund under management and high concentrated bets on select stocks, makes the schemes very risky,” he added.
“We are conscious of that fact and we will be working towards that,” Naqvi said, adding the firm planned to cut percentage holdings in individual stocks in days to come to moderate risk.