HDFC AMC gets index help

 The Economic Times

HDFC AMC gets index help

This just happened. Navneet Munot, the chief investment officer at SBI Mutual Fund is now appointed as the new managing director and CEO of HDFC AMC. He replaces Milind Barve, the present managing director of the AMC.

Hidden in plain sight. SBI MF was still a mid-sized mutual fund when Munot took over as CIO in 2008. He got corporate governance on the front foot at SBI MF and delivered returns in its equity funds. Later, he successfully put up the biggest ETF in the country with a present size of INR74,000 crore of assets under management with the EPFO as its top investor. Those who know him say that he is the best person for the top job at HDFC AMC, the biggest private-sector mutual fund with assets worth INR1.38 lakh crore in equities. Many of HDFC AMC’s funds are underperforming the benchmark indices.

One last thing. HDFC AMC has so far not taken much interest in ETFs. The size of its Nifty ETF is INR468 crore, small by industry benchmarks. With more capital shifting to index funds, this is an area that Munot is expected to grow.

Playing card

This just in. Former US Ambassador to India Richard Verma to join Mastercard as executive vice-president for global public policy and regulatory affairs.

Inside the move. Ambassador Verma, popularly known in US tech circles as Rich Verma, is a big catch for Mastercard. More so given that its India biz had its struggles after hitting an adverse policy environment. Things became difficult for the payments giant ever since the government started pushing RuPay cards over foreign networks. It should help Mastercard’s cause that he is closely entrenched in the Indian foreign-policy system. Verma was serving as vice-chairman and partner at the Asia Group, an advocacy forum on US-Asia relationship which was closely working on smoothening tech-policy hurdles. Whilst the company has not yet made an official announcement on the appointment, two sources confirmed it to ET Prime.

One last thing. Verma was an aide in the Obama administration, and is believed to have a good working relationship with US President-elect Joe Biden. He was among the Indian-Americans tipped to be part of the Biden administration to be announced around November 26. That seems unlikely now.

Urban distress

In the news. Reliance Retail acquires online furniture seller Urban Ladder (UL) in an INR182 crore distress buyout.

Inside the news. Reliance has hitched one more venture to its digital juggernaut. It acquired O2O (Fynd), delivery (Grab), ed-tech (Embibe), music streaming (Saavn), pharma (Netmeds) and SME digitisation (Nowfloats) most of which were bought in distress sales. A decade of boom-bust cycle of e-commerce ventures has clearly offered Reliance a happy hunting ground. In the case of UL, the selling price is merely a fifth of the total money it raised in the past eight years and just 12% of its peak valuation of USD200 million from three years ago. UL built a premium brand, even though it failed as a business. Its approach to selling furniture online may have been ahead of its time, but post the pandemic, as people are looking to improve their living standards whilst spending more time at home, Mukesh Ambani may have timed this just right.

One last thing. UL emerged amid the boom period of digital-commerce ventures, and lost steam as it stuttered on scaling. Horizontal e-commerce players successfully launching furniture vertical also meant increased competition and few exit or fundraising options.

That's all the <PRIMESHOTS> for today, folks. See you tomorrow!

Thank you,

Pravin Palande, Sandhya Sharma, and Manu P Toms

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