Nippon Life India Asset Management (MF)

About

Nippon Life Asset Management Ltd. started mutual fund operations in 1995 as the asset manager for Reliance Mutual Fund, part of the Anil Ambani (ADAG) group. The Reliance stake was sold to Japanese Nippon Life in 2019. NAM was the first AMC to list on Indian stock exchanges in 2017. The AMC is sponsored by Nippon Life Insurance Company (NLI).

According to the NAM website, the firm manages assets of INR 293, 159 Crores​​ (~ USD 36.64 Billion, conversion rate $1 to INR 80) as of March 31, 2023. Its AUM increased by 3.5% compared to March, 2022. It is one of the top 5 AMCs in India. The firm’s market share is 7.2% as of March, 2023. 

NAM has established its presence in over 270 locations throughout India, surpassing its competitors such as UTI AMC, HDFC AMC, SBI AMC and ICICI Prudential in terms of geographical reach. Additionally, the firm has a strong presence in B-30 cities, contributing to 13% of their AUM.  

NAM acts as an advisor for India focused equity and fixed income funds in Japan, Korea and Thailand. NLI is a leading Japanese life insurance company that operates in North America, Europe and Asia. It manages its asset management operations in India through its subsidiary Nissay Asset Management Corporation.

Key figures  from financial statements for FY 21-22 & 22-23

The conversion rate used is $1 to INR 75

YearTotal Income (INR crores)Total Expense (INR crores)Net Profit (INR crores)Total Income (USD millions)Total Expense (USD millions)Net Profit (USD millions)
2021-221,535.63543.14743.37204.7572.4299.12
2022-231,491.78471.75885.58198.9062.90118.08

Key staff

Sundeep Sikka, Executive Director & CEO  He has been a part of the firm since 2009. He previously worked at ICICI Bank. He has served as both the Vice-Chairman and the Chairman of the industrial organization AMFI (Association of Mutual Funds in India). He has an MBA from Pune University.

Sailesh Raj Bhan, CIO – Equity investments – He has a track record of 27 years in Indian Equity Markets. He has been a part of the firm since 2006. In his capacity as CIO, he manages three flagship funds. He holds an MBA in Finance and a CFA charter.

Amit Tripathi, CIO – Fixed income investments – He has more than 20 years of experience in Financial Services. He has been with NIMF for 14 years. He has a postgraduate diploma in Finance from FORE School of Management, New Delhi.

Investment philosophy 

The following was taken from the firm’s website 

 ‘Nippon Way’

At Nippon India Mutual Fund, they cater to a diverse range of investors, including retail and high net worth individuals. Their goal is to achieve positive investment performance with consistency and sustainability. To effectively manage risks, they have established sector deviation limits, particularly for the largest sectors in specific funds. Instead of making drastic macro calls, they encourage their Fund Managers to operate within a well-defined framework that minimizes excessive risks while allowing some flexibility.

Investment Process – Active Share serves as a metric to assess the extent to which a manager’s portfolio differs from the benchmark index. It quantifies the percentage of stock holdings that deviate from the benchmark. Active Share ranges from zero, indicating a pure index fund with no deviation, to 100%, indicating no overlap with the benchmark holdings. Active Share provides insight into the level of differentiation and potential for active management within a mutual fund.

Diversification – The fund managers at Nippon India Mutual Fund have chosen to maintain balanced factor or style exposure for their diversified equity funds. 

Risk Rating – The Research Team internally rates all the stocks under our coverage on a Scale of A to D, by considering Business Risks and Management Quality. 

Analyst Output –

Media

U.K. Sinha to join as NAM India chairman, April, 2023 https://www.thehindu.com/business/uk-sinha-to-join-as-nam-india-chairman/article66778355.ece

Former SEBI chief U.K Sinha is appointed as the Chairman and Independent Director of NAM as of May 1, 2023. 

Nippon Life Asset Management India, Analyst Report, April, 2023 https://www.icicidirect.com/research/equity/nippon-life-(india)-asset-management-ltd/19961,

The analyst report highlights the performance of the AMC as of March, 2023. The firm’s market share is 7.2% and 13% of its AUM comes from B-30 cities. Its revenue declined by 2% but AUM has been steady and increasing.

Nippon India Mutual Fund adds most folios in FY23; tally nears 2 crore on digital push, awareness, April, 2023 https://economictimes.indiatimes.com/mf/mf-news/nippon-india-mutual-fund-adds-most-folios-in-fy23-tally-nears-2-crore-on-digital-push-awareness/articleshow/99508223.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

 Nippon India Mutual Fund has become the largest fund house in terms of folio count, with nearly 2 crore investor accounts at the end of the financial year 2022-23, according to CEO Sundeep Sikka. The fund house has witnessed consistent growth in folio count over the past two financial years, adding 96.42 lakh investor accounts during that period. In the last fiscal year alone, it added 26.2 lakh folios. The total folio count increased from 99.82 lakh in March 2021 to 1.7 crore in March 2022, and finally reached 1.96 crore in March 2023. Sikka attributes this growth to the acceptance of mutual funds as an investment product and the digital push. Nippon India Mutual Fund has a retail focus, attracting investors from across the country, including regions like Uttar Pradesh, Bihar, and Assam. In terms of folio count, ICICI Prudential MF, HDFC Mutual Fund, SBI Mutual Fund, and Kotak Mahindra Mutual Fund also experienced significant growth. The company has been successful in building its brand through a diverse range of products, robust risk management processes, and an experienced research team. 

In addition to traditional channels, NIMF has seen increasing traction on its digital platforms, with digital contributions accounting for 53% of the company’s business transactions. This highlights the growing importance of digital channels in the mutual fund industry.

 Got Rs 10 lakh to invest? Nippon MF’s Sailesh Raj Bhan recommends two asset classes, January, 2023  https://www.moneycontrol.com/news/business/personal-finance/got-rs-10-lakh-to-invest-nippon-mfs-sailesh-raj-bhan-recommends-two-asset-classes-9885841.html

Sailesh Raj Bhan has been appointed as the new CIO-Equity at Nippon India Mutual Fund, replacing Manish Gunwani. Bhan, who has spent over 16 years at the fund house, has extensive experience in the Indian equity market. He has been managing flagship funds like Nippon India Large Cap Fund, Nippon India Multi Cap Fund, and Nippon India Pharma Fund for over 15 years.

Bhan emphasizes simplicity in investments and suggests a balanced asset allocation between equity, debt, and gold. He recommends diversified funds for investment. Bhan advises investors to approach sectoral funds by considering their exposure in diversified indexes and cautions against investing in multiple sector funds. He recommends rebalancing the portfolio once a year or in response to significant market movements. Bhan believes in the long-term potential of equities but suggests selling equities if the asset allocation becomes distorted. Personally, Bhan follows a 60% equity and 40% debt asset allocation, preferring fixed deposits and tax-saving bonds for fixed income exposure. His investment mantras include discipline, early market entry, and patience.

 Manish Gunwani quits Nippon India MF; Sailesh Raj Bhan is new CIO – equity, November, 2022. https://economictimes.indiatimes.com/mf/mf-news/manish-gunwani-quits-nippon-india-mf-shailesh-raj-bhan-is-new-cio-equity/articleshow/95268132.cms

Manish Gunwani has recently resigned from his position as the CIO-equity at Nippon India Mutual Fund after serving for five years. During his tenure, Gunwani led a team of over 28 investment professionals and managed popular schemes such as Nippon India Flexi Cap Fund, Nippon India Growth Fund, and Nippon India Balanced Advantage Fund. In light of Gunwani’s departure, Sailesh Raj Bhan has been appointed as the new CIO-equity at Nippon India Mutual Fund, effective from January 1, 2023. Bhan has been a part of the organization and will be assuming his new role.

MMI interview with Sundeep Sikka, 2022

MMI Interview with Sundeep Sikka, dated 2014

MMI Interview with Sunil Singhania, dated 2014

Prepared by – Debolina Dey,  Smriti Prabhu,  Saiyam Shah

Updated by: Tanvi Gandhi June 4, 2023

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