Bajaj Finserv Launches Mutual Fund Business, Promises Differentiation

Bajaj Finserv Mutual Fund becomes the 41st player in India's booming mutual fund industry.

<div class="paragraphs"><p>Sanjiv Bajaj, CMD Bajaj Finserv (right), Ganesh Mohan, CEO, Bajaj Finserv AMC (left). (Photo: Vijay Sartape/BQ Prime)</p></div>
Sanjiv Bajaj, CMD Bajaj Finserv (right), Ganesh Mohan, CEO, Bajaj Finserv AMC (left). (Photo: Vijay Sartape/BQ Prime)

Bajaj Finserv Ltd. announced its foray into India’s booming mutual fund business on Tuesday, launching Bajaj Finserv Mutual Fund. It is the 41st entrant into an industry that has amassed assets under management of over Rs 41.5 lakh crore as of April this year.

The company had received final registration from the Securities and Exchange Board of India in March this year. Currently, it has approval to launch seven schemes. The mutual fund will start rolling out these schemes within the next 30 days, starting with the fixed income schemes, according to Ganesh Mohan, chief executive officer of the company.

The mutual fund has approval to launch a liquid fund, money market fund, overnight fund, arbitrage fund, large and mid-cap fund, balanced advantage fund and flexi cap fund.

As the newest entrant in a competitive landscape, the mutual fund will look to take “late-mover advantage”, Mohan said. The mutual fund industry is currently undergoing several key changes in regulation—most important of which is the imminent amendment in the rules governing charges.

The move from a scheme-wise calculation of total expense ratio to a mutual fund's assets under management-level will likely drive a review of product offerings.

Already, the mutual fund has taken a call to not launch an actively managed large-cap scheme, because most fund managers in the industry have consistently failed to beat the benchmark returns. Instead, the mutual fund will look to introduce a passively run large-cap scheme, according to Nimesh Chandan, chief investment officer, Bajaj Finserv.

The mutual fund has not been given any targets for assets under management at this point, according to Sanjiv Bajaj, chairman and managing director.