LIC Mutual Fund Eyes Four-Fold Growth in Passive Fund AUM by FY26: CEO Ravi Kumar Jha

LIC Mutual Fund Eyes Four-Fold Growth in Passive Fund AUM by FY26: CEO Ravi Kumar Jha

LIC Mutual Fund is targeting a significant increase in its passive funds' assets under management (AUM), with plans to grow its portfolio more than four-fold to ₹25,000 crore by the financial year 2026, according to the fund's Managing Director and CEO, Ravi Kumar Jha. In an interview, Jha also reaffirmed the fund house’s ambition to reach ₹1 lakh crore in total AUM by FY26.

"Last fiscal year, our AUM grew by nearly 70%, outpacing the industry’s 34% growth. We have increased our AUM from ₹27,700 crore to over ₹35,000 crore this year, and we are confident of crossing ₹60,000 crore in the current financial year," Jha said. The company is currently raising subscriptions for its new manufacturing fund and is planning to launch a multi-asset allocation fund in the December quarter, followed by a couple of exchange-traded funds (ETFs) in the March quarter.

At present, LIC Mutual Fund’s ETF and index funds account for around ₹5,500 crore in AUM. Jha stated that they aim to boost this figure to ₹25,000 crore by FY26, with 2-3 additional ETFs in the pipeline.

IPO Plans on the Horizon

Regarding future growth, Jha confirmed that the company is considering a public listing after reaching the ₹1 lakh crore AUM milestone. "Once we achieve this target, we will be in a strong earnings position and will certainly evaluate the option of an IPO. This is our ultimate goal, and LIC has encouraged us to explore listing at the right time," he added.

Leveraging LIC’s Strength

Jha highlighted the synergies between LIC of India and LIC Mutual Fund, particularly in expanding the fund’s branch network. The company is working closely with its parent company to increase its physical presence across India, focusing on underserved regions beyond the top 30 cities. "Our goal is to establish LIC MF branch offices in all 113 LIC division centers across India," Jha said. The fund house plans to expand its branch network from 35 to 50 by the end of the current financial year.

Digital and Distribution Mix

Currently, LIC Mutual Fund’s distribution is led by mutual fund distributors (MFDs) and LIC agents, who make up 70% of its distribution channels, followed by banks at 17% and direct channels, including digital platforms, at 13%. Jha noted that LIC Mutual Fund is working on improving its website and mobile application to simplify the investment process for users, aiming to streamline procedures and reduce the need for multiple clicks or lengthy steps.

“We are focused on enhancing our digital experience to make it easier for investors to purchase our products, with features like automatic population of user details after entering PAN information,” Jha added.

With these strategic initiatives in place, LIC Mutual Fund is gearing up for substantial growth and a potential IPO in the near future.