By Anubhav Mukherjee | August 30, 2023

BlackRock’s joint venture with Ambani’s Jio Financial Services (JFS) will prompt retail investors to pick up stakes in Indian Asset Management Companies (AMCs), said Sunil Subramaniam, managing director of Sundaram Asset Management Company Ltd.

The world’s largest asset manager made a comeback in India in July 2023. The $300 million venture will bring ‘new investors’ to these funds and expand the market, said Subramaniam who manages $5.4 billion in assets.

“This will provide a good hunting zone for the existing asset management companies,” said Subramaniam, explaining that this will allow funds to cross-sell their products to existing and new customers.

The mutual fund market in India is currently valued at Rs.46+ lakh crore. Blackrock manages Rs.11 lakh crore worth of assets. The current mutual fund penetration in India still remains in single digits. BlackRock-Jio, although a competitor, would help expand the market, said the fund manager.

BlackRock’s entry in the asset management race will give tight competition to existing companies, as they plan to acquire customers with heavy advertising and marketing. Reliance’s JFS has deep pockets, allowing them to ‘burn cash’ in advertising without worrying about losses, said Subramaniam.