LIC Mutual Fund (LIC MF) has set an ambitious target to go public once its Assets Under Management (AUM) crosses INR 1 lakh crore. The fund’s Managing Director, R.K. Jha, stated that this milestone is central to the company’s long-term growth vision and its ability to scale operations, especially in a highly competitive mutual fund market.
At present, LIC MF’s AUM stands at around INR 78,000 crore. While that’s a significant figure, the company is optimistic about reaching its INR 1 lakh crore target, which would bolster its strategic positioning in the sector. Jha highlighted that this growth goal would pave the way for expanding operations and catering to an increasing base of investors.
LIC MF’s IPO will be the second offering from LIC. LIC launched its IPO of INR 20,557 crore, making its stock market debut on 17 May 2024. However, investors experienced negative returns of 7.77% on the debut. The LIC IPO is considered one of the biggest IPOs in India.
Strategic Value of LIC Mutual Fund IPO
The prospect of an IPO is viewed as a critical piece in LIC MF’s growth strategy. A public listing would give the mutual fund access to capital markets, opening doors to funding that could fuel further expansion. These funds, according to Jha, would be directed toward increasing product offerings and enhancing service capabilities to meet evolving investor needs.
However, Jha was quick to point out that the final decision to move ahead with the IPO would depend on various factors, particularly market conditions and the company’s performance metrics at the time. This cautious, measured approach reflects LIC MF’s focus on ensuring long-term sustainability while aiming to create value for its shareholders.
LIC MF and India’s Booming Mutual Fund Industry
India’s mutual fund sector is seeing rapid growth, driven by a surge in retail investors and rising awareness about the benefits of mutual funds. LIC MF plans to tap into these trends by growing its AUM, with the eventual aim of expanding its market share. An IPO would serve as a powerful tool to enhance its visibility and establish a stronger footprint in the sector.
Retail investors, more than ever, are looking at mutual funds as a reliable and effective way to grow their wealth. With this shift in investor behaviour, LIC MF’s focus on growing its AUM could significantly influence how well its IPO performs. A public listing, after reaching the INR 1 lakh crore mark, would offer an opportunity for the fund to tap into a wider base of investors, allowing them to be part of its growth journey.
LIC MF’s IPO on the Edge
To sum it up, LIC Mutual Fund has set its sights on an IPO once it achieves an AUM of INR 1 lakh crore. This goal is part of a broader strategy to increase market presence and boost investor confidence in the fund’s growth potential. While the exact timeline remains uncertain, as market conditions will play a role in the final decision, the eventual IPO could mark a significant milestone for LIC MF and the asset management industry at large.
So far in 2024, 11 IPOs have made their debut in the stock market, of which three experienced negative returns. Among these, Bajaj Housing Finance delivered a remarkable return of over 135% on its listing day. On average, these IPOs have generated a return of 17.66%.
