RETAIL FUNDS | Cesar Tordesillas, India

HSBC Mutual not looking to sell stake or exit India

Rumors that HSBC will sell stake or exit its asset management business in India were denied the the CEO of HSBC Mutual Fund, Puneet Chaddha.

"I can categorically say that am not involved in any such discussion," Mr Chaddha said, adding, "We're certainly not looking to sell stake or partner with anyone."

On the contrary, Mr Chaddha said, HSBC is open to acquiring assets to grow its business in India.

"We're very open to growing inorganically... But we're very careful about valuations. We're very conscious of the value that we would have to pay for any such acquisitions. The deal has to make sense - both financially and strategically," Mr Chaddha said.

According to Mr Chaddha, 2011 - 2012 was terrible for most asset managers in the country as they felt the full impact of the entry load ban, that commenced from August 2009, only during last fiscal. Lacklustre markets coupled with abundance of high yielding debt products and low distributor support resulted in poor appetite for mutual fund products the whole of last year.

"In the short-term, asset management business in India certainly doesn't look attractive. We're not going to see a huge demand for asset managers in the short term... But then with a young thriving population, superb economic growth and strong political system, India is a market to be present in," Mr Chaddha said.

Mr Chaddha feels there is a need to review the cost structure to make mutual fund distribution more viable for distributors.

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