New Delhi: In a big development, Jefferies Financial Group is preparing to enter India’s $900 billion mutual fund industry. The global financial services provider has appointed Milind Barve, former head of HDFC Asset Management Company, as an advisor to lead the project.
Notably, the development comes at a time when the mutual fund industry in India is growing at a rapid pace. Barve has been entrusted with the duty to formulate the company’s strategy and obtain regulatory approvals. Since the COVID-19 pandemic, people have been investing big in financial assets. Mutual fund total assets have more than doubled in the last five years, data show.
Jefferirs & Indian Mutual Fund industry
Jefferies’ entry into the India’s Mutual Fund industry will be very interesting as it will face stiff competition in India from major banks like HDFC Bank, ICICI Bank, and State Bank of India, which already have a nationwide network. Global firms like BlackRock are also a major competitor, having launched a fund in collaboration with Mukesh Ambani’s Jio Financial Services. Fintech platforms like Groww and Zerodha are also competing with traditional companies.
Indian Stock Market Dynamics
India’s stock market has more than doubled in the last five years to $5.1 trillion. Millions of retail investors have pumped in money in the share market. However, over the past year, the Indian stock market has underperformed as compared to some emerging markets. The biggest challenge the domestic equities market is facing is the relentless selling by foreign investors who have been retreating due to ‘weak’ quarterly earnings and ‘high valuations’ of stocks. However, a significant market decline could test the enthusiasm of Indian investors.
Jefferies’ business
Jefferies’ global business is performing well. In the September quarter, the company generated record revenue of $2.05 billion, a 22 percent increase from the previous year. Asset management revenue nearly tripled, reflecting the company’s growing ambition in this area.
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