Chennai, July 15 (IANS) After buying out the stakes of its mutual fund joint venture partner BNP Paribas, city-based Sundaram Finance is not in a hurry to tie-up with any other group for its asset management business, a top group official said Thursday.
‘The mutual fund business will be 100 percent owned by us. After we bought out Newton Investment Management’s stakes in 2002, the mutual fund business was run by us without any joint venture partner for four years. The business grew from Rs.800 crore to Rs.2,800 crore when BNP Paribas came in as our partner,’ said Chairman S. Viji.
He told reporters on the sidelines of non-banking finance company Sundaram Finance Ltd’s general body meeting here
that the group can take this business forward as nearly 84 percent of it consists of equity funds. ‘And we are good at managing it.’
‘The BNP Paribas brought in expertise in liquid and debt funds,’ said Viji.
Added Managing Director T.T. Srinivasaraghavan: ‘Of all other mutual funds we have extensive retail reach. We have around 500 branches and this is expected to go up to 625 to 650 this year. Retail reach is what is important for this business.’
On the issue of the group selling its 74 percent holding in its non-life insurance venture Royal Sundaram Alliance Insurance Company Ltd, he said: ‘Such talks have been in the market for nearly seven months. We do want to comment on the matter.’
Earlier addressing Sundaram Finance’s shareholders, Viji said the current financial year started off on a strong note.
‘The offtake of commercial vehicles is expected to remain buoyant in the second quarter as well, driven by improved freight availability, better freight rates and advancement of purchases ahead of the implementation of new emission norms from October 1, 2010,’ he said.
According to him, the second half of the current fiscal may temper down the growth of commercial vehicles owing to the new emission norms and the resultant increase in vehicle prices.
Referring to the company’s submission to the finance ministry with regard to tax treatment of income recognition and provisioning in respect of non-performing assets, he said the government should treat asset financing companies on par with banks and housing finance companies.