Shifting gears: Bandhan MF plans to unlock its growth potential

The fund house has done well on debt side but equity has been a mixed bag. It plans to increase stocks coverage

- Jash Kriplani

It was hitherto known as IDFC Mutual Fund (IDFCMF). It is now Bandhan MF. The name change comes after the Securities and Exchange Board of India approved the acquisition of IDFC MF by Bandhan Financial Holdings (the parent company of Bandhan Bank), GIC (Singapore government's sovereign wealth fund) and private equity firm ChrysCapital.

How does the acquisition help Bandhan group? It can now tap into the fast-growing ₹40 trillion mutual fund (MF) industry. And Bandhan MF can take advantage of Bandhan Bank’s numerous outlets in rural areas. And, it has already put in place its expansion plans.

Debt side story

Bandhan MF had ₹1.18 trillion of average assets under management (AUM) in the December quarter, according to data from Association of Mutual Funds in India (Amfi). It is the 9th largest fund house in the country.

The asset mix of the fund house is tilted towards debt schemes. Of the ₹1.18 trillion AUM, 60% is held in debt funds, 21% in equity funds and the rest in different asset categories.

What has worked in favour of the fund house, say experts, is its debt scheme performance. “The fund house has followed a well-structured investment process and has shown strong capability on interest rate calls and credit selection. As an investment philosophy, the fund house has always focused on high-rated securities on the credit spectrum, well before the credit crisis emerged in 2018," says Kaustubh Belapurkar, director, fund research, Morningstar.