Aditya Birla Sun Life Amc Ltd

NSE:ABSLAMC

Earnings Call Transcript 2024-Q1

[Operator]

Ladies and gentleman, good day, and welcome to Aditya Birla Sun Life Asset Management Q1 FY '24 Earnings Conference Call, hosted by InCred Equities. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Jignesh Shial from InCred Equities. Thank you and over to you, sir.

[Jignesh Shial, analyst]

Yes. Thank you, Ziku, and good evening, everyone. On behalf of InCred Equities, I welcome all to Aditya Birla Sun Life asset mangement 1Q FY '24 Earnings Conference Call. We have along with us Mr. A. Balasubramanian, managing director and CEO; Mr. Parag Joglekar, chief financial officer; and Mr. Prakash Bhogale, Head of Investor Relations. We are thankful the management for allowing us this opportunity. It would now like to hand it over to Mr. A. Balasubramanian, managing director and CEO of Aditya Birla Sun Life Asset Management for his opening remarks. Over to you sir.

[A. Balasubramanian, executive]

Thanks, Jignesh and thank you for the introduction. And good evening to everyone attending today's investor's call. I hope you all had the opportunity to go through the earnings presentation, is available on the stock exchanges and our website as well. Let me first begin with as a customary, the economic outlook and the mutual fund industry update. The global economy is facing increasing expectations of rate hikes. Of course, as I speak the -- actually the [ preliminary ] refund rate is hiking due to sustained growth and high inflation, and policymakers in these regions remained hawkish, even though the headline inflation has softened. Core inflation, however, remains at stubborn. The global economic landscape is witnessing diverse trends with the different regions facing unique challenges. While some central banks are adopting a hawkish stance in response to inflationary pressures, others are exploring measures to bolster their economies amid uncertainties like China. The macroeconomic outlook for India remains promising. India has thrived and continues to stand tall as one of the world's fastest growing economies and forecast from both global and domestic exports project a robust growth of 6% to 6.5%. This positive sentiment is underpinned by the strong fundamentals. Notably, India has boosted a healthy GDP print in in FY '23, a narrowing current account and fiscal deficits, well controlled inflation, stable interest rates, impressive tax collections and growing foreign exchange reserve [ then ]. Additionally, the manufacturing sector has shown stability with a steady PMI and improved capacity utilization, leading to lower NPA. The credit culture has also seen a positive shift [ represent ] a higher repayment intent and raising tax collections.

And these factors currently point to the economic stability to sustain its growth momentum. Moreover, the government focused on infrastructure development, digital transformation, and sectoral reforms augurs well for economic feature. The interesting strength of our economy can to be attributed to its reliance on domestic demand, favorable demographics, political stability and a progressive reform agenda set by the government. Additionally, the domestic and manufacturing sector has received a boost through the China Plus One strategy.

While the overall economic situation, as I just mentioned is phased with respect to mutual fund industry, the Indian Mutual Fund Industry is quarter-on -- quarter average asset under management grew by about 14% year-on-year to INR 43 lakh crores as of June 30, 2023. They represent an increase from the previous year of [ 37.70 ] lakh crores. In Q1 FY '21, the mutual fund industry witnessed inflow of our equity, liquid and EPS schemes. The industry SAP book grew by about INR 12,276 crores to June 2022 to about INR 14,734 crores in June 2023, indicating growth of about 20% year-on-year.

During the quarter, the total NFO collection was about INR [ 5,500 ] crores, which includes [indiscernible] schemes. The number total of mutual fund investors stood at INR 13.1 crores as on June 30, 2023, an increase of 11% year-on-year, compared to INR 13.64 crores on June 30, 2022. The industry witnessed a net equity sales of around [ 13,900 ] crores in Q1 FY '24, 3 new fund offerings and existing funds. Within the existing equity and hybrid categories, the most of the inflows are coming to arbitrage, small cap, mid-cap, a large and mid-cap and multi-application fund saw the highest inflows during the quarter.

During the quarter, the industry witnessed inflows. However, there was a decline in net inflows when compared to the previous quarters in equity. During the quarter, individual average AEM grew about over 26% year-on-year on reported to 57% total industry average AUM. The mutual fund average AUM for June 2023 from B-30 cities accounted about 17% where there was also marginal dip compared to the previous quarter. Coming to the ABSL AMC performance, as we come on the journey of FY '24, we [indiscernible] AMC are pleased to announce that promising start, which is, of course, representing in a form of average asset under management, which has grown compared to the previous quarter.

In fact, in Q1 FY '24, our total assets under management, including alternate assets have surpassed INR 3 lakhs crores to INR 38,000 crores. This noteworthy accomplishment signifies considerable progress exhibiting meaningful increase on the previous quarter figure of INR 2,86,000 crores and an impressive quarter-on-quarter growth of about 8%. The mutual fund average assets under management has reached INR 2,97,000 Crores and equity asset management crossed INR 1, 97,000 crores.

During the quarter ending June 20, 2023, we added about 1.2 million new folios as part of the broad strategy to continue to [indiscernible] customer acquisition. As a result of that, the overall folio account remained at 79 lakhs. SAP book size has increased by 10% year-on-year to about INR 987 crores. Our multichannel market initiatives designed to deepen our presence, our [ Real Estate ] positive results, we have strengthened our sales ecosystem and distribution network, we're bringing together the key levers like virtual relation manager, Sampark, service to sales, [indiscernible] channels and digital distribution in order to provide greater support to the overall retail initiatives that has a fund those are driving it.

Regarding our overall mix between retail and institutional customers, retails investors account about 49% of our assets under management. As part of our overall strategy, we are focusing on building the retail portion in both the [indiscernible] and B-30 cities as our contribution to B-30 is [indiscernible] and about 16%. Over the past few months and quarters, our business has been actually pursuing strategy initiatives -- our strategic initiatives that are real [indiscernible] outcomes.

Let me just quickly elaborate on the significant measures that we have taken to improve the overall performance of the organization, which I'm sure as we progress further, will start reflecting. One, on the investment side, we continue to lead in [indiscernible] funds with our robust performance and consistently strong market presence that we have created. On the equity side, our funds have witnessed the performance turnaround over the last 3 quarters, I expect the same momentum to continue in the coming quarters.

And most of our schemes barring a few have not really beaten the benchmark and restrict the category on a one-year basis, also have beaten the peer group with a higher margin compared to the last few quarters, which I believe that would help in terms of building our equity as we move forward with the recent improvement we are witnessing which is start reflecting in the long-term performance as we move forward.

We have further strengthened the investment team, the process enhancement and bolster the team's capability. We also added sector specialist in real in [indiscernible] management responsibilities in order to give them high responsibilities playing to the strength while enabling the necessary resources also brought in sharper focus, and we have started to witness the [indiscernible] to offset change in the investment team, which is reflecting on the overall improvement in the performance there.

Our decision to implement a focused fund offer in order to drive our equity sales in retail. As a targeted campaign has been the result the garnering favorable outcomes, underline considerable traction within the market, which we measure in the form of gross sales volume improving in some of these fund offers that you have created. And hopefully, should set the ball rolling for the subsequent period as well. We have developed specialized segment, which caters the high net worth individual segment.

Through this, we provide a comprehensive range of services and sales offerings tailored specifically to meet the needs of our valued HNI clients. Our dedicated care facility ensures that HNI investors receive specialized attention and special attention on exceptional service to optimize their investment experience.

Furthermore, we've extended our range of value products to include offerings such as Sampoorna SIP and Turbo STP in order to build our retail as well as increase the overall customer base. Over the past financial year, we have been -- we have been dedicated to expanding the size of the passive and alternate investment fund. In fact, our passive product offerings grew by over 2x to around [ INR 28,700 ] crores. The expansion of our passive bouquet has been equally noteworthy, now encompassing about 40 products on attracting and growing customer base around 5 lakh folios in the [indiscernible].

On the PMS/AIF front, we have raised commitment about INR 893 crores in the current quarter by launching a category, India Equity Services oriented fund by leveraging our multi-channel distribution footprint that we have established. During the quarter, we launched ABSL, India Special Opportunities Fund and the ABSL India Equity Service portfolio under the AIF category. We also received a semi clearance for launching an ABSL, India Equity Service funds category 3, AIF as well.

There's, in fact, the real focus we are giving on building our alternate business already started yielding results where we collected the first INR 893 crores. I'm sure the subsequent pipelines will also help in building the further augment our asset [ class ] in this space then.

After setting a GIFT City, we are pleased to announce the launch of ABSL Global Emerging Equity Fund, an industry first fund, domiciled in GIFT City which is in Gandhi Nagar, Gujarat. This fund will strategically fit into ARGA emerging equity fund, allowing our investors to access and benefit from emerging market opportunities.

In fact, as we have taken this price to the market, we have seen reasonably good response in terms of the innovative product that we're offering to offer a solution to the investors in India under the LRS category as well as NRI investors who can potentially part in an emerging market through our GIFT City product. This is the first product they have launched under in the mutual industry space, and I'm sure the more such products will come in the pipeline in the next few quarters. On real estate front, we have successfully deployed to investment for the Aditya Birla Real Estate Credit Pportunities Fund. We're also seeing the pipeline of, of course proposals are many. At the same time, our efforts to build our engagement with the BGO should start dealing with us soon.

In light of our performance, the overall improvement that we are witnessing in the equity, we acknowledge the positive outcomes but also remain ever cognizant of the business dynamic and on [indiscernible] through all the time. The markets we operate are ever-changing and dynamic in HS. And the industry landscape is also bound to encounter fluctuations and transformation in the forseeable future. With that in mind, the only thing that we can speak with certainty is a [indiscernible] commitment to our vision and long-term objectives.

And we shall diligently adapt to this [indiscernible] circumstances prior to the navigate potential challenges. Our unlevering dedication to excellence and strategic wholesale that will bring in -- will be instrumental in charting the cores that aligns with the stakeholder interest. I just want to mention that as a fund house keep making the both correction, what was needed to build our overall client to the next levels.

Moving on to the financials for the quarter. Our earning for Q1 FY '21 was about was at INR 388 crores versus INR 273 crores in the Q1 FY '23 up by about 42% year-on-year. Profit after tax for Q1 FY '24 was about INR 184 crores in Q1 FY '21 versus INR 102 crores last year in Q1 FY '23 with again up by [ 29% ]. Of couse this number includes other income numbers. With this, I would like to conclude and open the floor for any questions that you may have.

[Operator]

We will now begin the question-and-answer session. [Operator Instructions] Our first question is from the line of Prayesh Jain from Motilal Oswal.

[Prayesh Jain, analyst]

Sir, firstly, on the SIPs book, if I look at all the fastest [Technical Difficulty] Slide 11. So with the number of outstanding live outstanding SIPs, [indiscernible] registration or the SIP book for that matter, all have been on a declining trend in a sequential basis -- on a sequential basis. Even for the industry, we saw some stagnation in the month of June with respect to the overall SIP volumes.

So is there a challenge in that sense to to get new SIP registrations or -- although we kind of change this value that we always talk about penetration being very low in the country. And so -- but how do you kind take this forward from...

[Jignesh Shial, analyst]

Yes.

[A. Balasubramanian, executive]

I think thanks, Prayesh for first question. The SAB in general, the trend that we have seen since the time the market started getting into the complete different zone. We generally have seen the registrations versus cancellations versus [ experience ] SIPs in general, have seen some rise in the cancellations and [ experience ]. And that primarily reason why not only for the industry, the gross number, which is INR 41 crores number that you saw for the industry is generally the net inflow as a result of these experience, generally number is low. This -- again, for the whole industry and for us as well, we saw some kind of stagnation as a result of that.

Second, which also, of course, came in the last 3 months, I think there are certain regulatory changes which came especially on the SIPs, which you need to get triggered in the form of OTP-based verifications which is more operation-related ratios, but also would have -- I don't know the data for this, but I'm saying from more from behavioral point of view also have resulted in [indiscernible] of SIPs getting dropped as a result of that. These were 3 -- 2 primary reasons as a result of that is something which I would say.

And in terms of registration, which is a INR 49 crores number is I always feel feel proud about that. I think while Experience and cancellation is not in our control, but getting new customers in our control, that's what something has been rising. And for us, whilst it has remained segment at close to about INR 1,000 crores, so our vision has been to take it INR 1,200 crores. Some of the efforts that we take is some of launching new goal based SIPs, convenience-based SIPs, like Sampoorna SIP I mentioned about, Turbo STP I mentioned about. Some of these initiatives are taking are more the intention to make customers to look at SIPs as a long-term investing not for short term.

And then the last piece that I want to say is while the digital platform has been, I think, a good amount of SIPs in terms of new customer addition. But as [indiscernible] mentioned that, those SIPs generally get registered for low ticket, small ticket. And second is that we come for sometimes 3 months, sometimes 1 year. So the drop rates segment is -- also in that segment is. We will have that what generally 1 pursues to be. I think the combination of multiple things. But clearly, the -- from a longer-term point of view, for us, especially having built the business in the last 10, 12 years where we take pride in building a strong retail franchisees through the SIP book. I think that continues to remain as a big focus area, though we may face some temporary challenges, but that's not something is being taken away from our radar.

[Prayesh Jain, analyst]

Got that. And on the yield front, like there's been a drop both sequentially and Y-o-Y. Could you explain that? And how -- what kind of trajectory do we anticipate for the rest of the year? .

[Parag Joglekar, executive]

Hi Paresh, just on the yield side, on the asset class, where your yield remain more or less same like equity remains in the range of around 70, debt in the range of around 22 to 25 basis and liquid remains in the range of around 12 to 13 basis. So those numbers more or less remain same, but change has happened due to the mix, which has changed and entered within the asset class.

And there is a growth in liquid and liquid fund scheme, which we have seen in the last quarter, resulting in a slight drop in the mix of equity, which has resulted in a drop in the yield overall blended yield for the company. Otherwise, the overall yield remain at asset class more or less similar.

[Prayesh Jain, analyst]

Okay. Great. And lastly, Parag sir, any thoughts on new formidable player getting into the market in the likes of [indiscernible] with the kind of expertise that they have globally, especially on the passive side, via their platforms, [ Aladdin ] or iShare for that matter. What is the kind of growth or challenges that you might anticipate? I know it's too early days, but any initial thoughts that would be great for 2 years from your side.

[Jignesh Shial, analyst]

Yes. Thanks Prayesh.

[A. Balasubramanian, executive]

Of course, given the fact, I'm a firm believer of mutual industry, passing INR 100 lakh crore size in the next -- in the years to come. And I also firm believe that we personal households will have a mature fund expense in India. So going by head, I think there is a space for more people to do the hard work for expansion of the industry. I'm sure as the industry expands as a wallet shares increases, and that will, of course, go to established players in the mutual industries like ourself.

Just to give you an analysis to give you. When of course -- we started 23 years back, we were 30 years back, we were close to about 3 or 4 fund houses. Today, we have 44 mutual funds and 80% of the mutual assets and management coming from the top 10 and top 5 contributes about 53% of AUM. So therefore, I would assume a similar trend will emerge as we move forward. But of course, more players coming in, establish player coming in. We'll bring in new practices, no doubt it'll bring in new product offerings that could come will also bring in some competitive space and only strengthen our [indiscernible] to actually, both in terms of product offering as well as an expansion of the customer base. Those will become more than a challenge. We need to also probably be more aggressive on that space as well.

But otherwise, I would only assume it will only help in expanding the market.

[Operator]

[Operator Instructions] Our next question is from the line of Lalit Deo from Equirus Securities.

[Lalit Deo, analyst]

So sir, just like 2 questions. So firstly.

[Operator]

Sorry to interrupt. We request you to use your handset for optimum audio quality.

[Lalit Deo, analyst]

Yes. Is this better? So sir, just 2 questions. So firstly, like during the quarter, we have seen some increase in our employee expenses. Anything to read into that?

And also, could you also qualitatively talk about like how has been the gross inflows in our equity schemes during the quarter as compared to the previous 2, 3 quarters?

[Parag Joglekar, executive]

So Lalit, on the employee expenses. Employee expenses actually are more or less than around that number only. In last quarter, there was a slight drop due to some provision -- to down in the provision of variable pay and bonus and that is why there was a slightly drop in last quarter. Otherwise, the people remain tightly in the similar range. Obviously, there are some recruitments and backfills which we have done which has slightly increased the number, plus we are strengthening our team on the alternate asset side, which is also increasing costs slightly. .

[A. Balasubramanian, executive]

Yes. With respect to your second question on gross sales. I think we divide this into 2 parts. Though we don't disclose the numbers broadly. But I think the way I see the trend, the focused fund, which I just mentioned about, which are driving it more with intention to drive those schemes which are relevant from the ownership point of view. At the same time, the sales team point of view, they remain focused in building volumes.

In those focus funds, we are seeing actually increasing gross volume going up as is about 7% to 7.5% kind of range from a normal range of about 4.5% to 5% to which you have dropped there. And which I see is some sense of improvement in the overall productivity, which should gain the momentum with the reasonably good backup of equity performance, which I just mentioned about the earlier comment also is now supporting. The fill is now -- is also being felt in the ground level. I think all combination put together, we should see that improvement now getting set.

[Lalit Deo, analyst]

And sir, just last question on the alternate side, like we are share, growing it well. So like what is our vision over the -- for the next 3 to -- over the next 3 to 5 years, like where do you see the overall AUM size in the alternate side? And how much of it should it contribute to our overall revenue and earnings? .

[A. Balasubramanian, executive]

Yes. Broadly, this 1 area where we are keeping our focus Lalit, 1 as you have seen this INR 800 crores we rise after briefing up the team in the AIF side. We've seen a faster success, in fact, this has helped in 2 ways: one, reaching out to all the market players and we could communicate both on the mutual fund progress that we are making.

And second, our vision for the AIF [indiscernible] -- and there is [indiscernible] in terms of raising INR 900 crores, if they don't have confidence on either from AMC, even the INR 900 crores [indiscernible] come. So that I see is a reflection of confidence of people to give their money on the AR side. We have created, of course pipeline of product within the equity, we have a pipeline of product on the credit side. And just to put there given the fact this segment will also help in improving our overall profitability as a contribution is something has remained as a big area of focus.

Right now, we are working with what [indiscernible] of member team and equity. We have time to beef up our fee income capability in terms of managing credit-oriented funds in this space. I mean these 2 combination put together, I think the road map is being kept to bring in a sharper focus on our -- on this space. In fact, was given at the rate case in the area for entire existing sales teams separate care to promote our AIF product because the team is one, but at the same time, they can actually sell multiple product as it cools for the customers.

So the very clear vision we are setting in for the one-off this thing, I'm not giving the number per se. But clearly, sharper focus we are bring on this space

[Operator]

[Operator Instructions] Next question is from the line of Devesh Agarwal from IIFL Securities.

[Devesh Agarwal, analyst]

first question, if I heard it right, you said on equity side, our yield is around 70 basis points. versus last quarter, you had mentioned of around 74 basis points. So there's a good 4 basis point decline, while our equity remains flattish on a Q-o-Q basis.

[Parag Joglekar, executive]

So Devesh, the yield was in the range of around 70 to 72 basis, it is a mixture of various schemes within the equity, which we are promoting and depending on the size of the scheme which we are growing, including arbitrage or tax relief and the other scheme. That change, but there is no big drop. It was in the range of around 72 to 70-odd basis.

[A. Balasubramanian, executive]

There's a big drop Devesh, smaller is the same, except on few schemes for what I got for [indiscernible] the 2 very minor [indiscernible] other is broadly the number remains the same.

[Devesh Agarwal, analyst]

Understood, Understood. And sir, on the passive side, what is the yield that we are making? .

[Parag Joglekar, executive]

So on passives, generally on EPS, it will be in the range of around 10-odd basis and on the index side, it will be slightly higher. It will be in the range of around 20-odd.

[Devesh Agarwal, analyst]

Okay. So at least on a passive portfolio, it would be closer to 15, 16 basis points.

[Parag Joglekar, executive]

Itself depending on how it is..

[A. Balasubramanian, executive]

Pragar. we also have a product within the [indiscernible] where we charge little higher expenses given the fact that we are bringing in some value-added in terms of frequent monitoring our portfolio as well as reshuffling the portfolio depending upon index [indiscernible] but equal right with index, which are higher expenses. The smaller mid-cap index, which are the higher expenses. So the expenses are higher as it stands today. Therefore, any volume increase could help in increase in the revenue.

But we've been pushing it a bit like [indiscernible] fund we do have. I think at the start, as we start seeing the volume increase on these products, we'll probably see the margin improving on that basis. Though we are currently charging higher than the normal ETF our active funds little charge is roughly more than [ 12 ] basis points. This product, we are positioned like that. And with intention to improve their contribution as well in the future.

[Devesh Agarwal, analyst]

And sir, when we see the passive AUM numbers, we were seeing Q-o-Q growth until last quarter, and it was a very healthy growth, especially in the index fund. But if we see the June quarter on a sequential basis, the number looks very flattish. So was there any particular product like a target maturity, which was doing very well until last year or last quarter. And this quarter, there was some moderation in the flows into those categories?

[A. Balasubramanian, executive]

Sure. I think, you rightly pointed out, Devesh. One, the ETF equity category, we have seen a growth, we have seen participations arising both in terms of customer additions as well as on institutional customers are coming in, in view of our plan, both in the NIFTY and index and the banking ETF. As far as the target maturity fund concerns, it comes into a passive category that -- though the AEM got closed from the passive due, but they have come to the actually managed debt funds. It was shifted there because it came for maturity. They all have to get rolled over. in the rollover, we can't do it in the target maturity space unless the customers want to go for it. So those rollovers actually got shipped on to the mutual fund to extent about 50% to 60%. And that's the reason why in the mapping, they would have gone out of the passive space there.

[Devesh Agarwal, analyst]

So you're saying that is now getting into the actual debt funds of fixed income funds.

[A. Balasubramanian, executive]

In fact, we saw shift from the dollar funds to offloading refund in the mutual fund space.

[Devesh Agarwal, analyst]

Okay. And sir, lastly, if I see the distribution channel mix, especially on the equity side, the share of Banca channel is kind of continuously coming down. If you compare on a Y-o-Y basis, it has come down from 13% to 10%. So is there any specific reason with some bank who have stopped selling a product or it's a general fall?

[A. Balasubramanian, executive]

I think it was largely because of the mix actually in terms of -- I must admit that last -- this quarter, we saw significant momentum on our fixed income space in terms of growth, which we saw in the last quarter of last year, we saw dip. Basically, we gained back and we gained more. That's primary -- I think, otherwise, the banking channels more or less remain adjusting for that. In terms of product being part of the recommendations, there are certain channels where the product [indiscernible] part of the recommendations, but still got dropped.

But again, that keeps going up and down because some of the people have changed their model of not more than recommending 2 products kind of things or 3 products kind of things. Therefore, it all comes in different spaces there. But otherwise the relationship engagement with the entire banking channel remains very, very strong. About as a brand, as a people as well as the product relevance. Therefore, that is not something which I see as a gap area.

[Operator]

[Operator Instructions] Our next question is from the line of Dipanjan Ghosh from Citi.

[Dipanjan Ghosh, analyst]

Two questions. First, on the cost side, you've been mentioning for a few quarters of investment in alternates and your also employee additions or expanding your distribution capabilities. So just wanted to get some sense of, let's say, from a medium-term perspective, how should 1 think of the cost ratios from here onwards? -- the core prospects of ESOPs.

Second, on your overall flow trajectory, you mentioned that you're trying to push some of the schemes -- select schemes and equities where you feel that the flows can be better. So if you can give some color in this preferred schemes, what would be your flow share or how that has been shaping over the past few quarters? Has this been on an increasing trend or a downward trend?

And lastly, to data-keeping questions, if you can quantify your ESOP expense for the quarter and your outstanding SIP AU.

[A. Balasubramanian, executive]

Yes. On the first question on the cost front, I think only in the case of alternate space and HNI space, these are 2 areas where we are looking at the briefing up the team, though HNI space, we are already done and rather direct not HNI space, direct as a team. We're also giving -- carrying out the people from our existing retail team to all the larger responsibility on building direct. Therefore, they'll have a little increase in cost industries, otherwise they are not significant. As for the AIF concerns, of course, we have to increase our team strength in the mutual QAAUM space. We're looking at adding 1 or 2 Individuals who could help us building our feature on the credit related funds where we see it as a great opportunity both in terms of building size and [indiscernible] segment is also quite hot on this space.

And third, of course, the margin could have to be high. As far as the investment concerns, while we have done all the basing up on the investment side, both in terms of restructuring the current responsibilities of team and given growth for the existing team of senior analysts to become a fund manager that also because the status is changing from [indiscernible] manager to the -- as a fund manager. Therefore, but also a marginal increase in cost because they have to map to the market. These are 3 areas which I see as a driver for the cost increase, which is not anyway significant, but broadly these 3 items would lead to margin increase in cost. So I can't quantify the number, that's why I see it.

And the second is gross sales we talked about the -- we have chosen 4 funds, which is basically fund equity and the large cap and the balance of [indiscernible] fund in the hybrid category and third, banking and branch share is,sorry, which is the third one.

[Dipanjan Ghosh, analyst]

So the multi-asset allocation and balanced advantage fund.

[A. Balasubramanian, executive]

multi-asset allocation and balanced advantaged fund. These are the 3 funds we have put. And even as the funds house which are promoting multi-asset allocation fund, given the fact -- we are the -- we are reasonably that's come in the top 3 in terms of AEM size, which we believe that in the current market, condition, multi-asset allocation fund could be 1 of the drivers and that's something we are pushing. We are seeing these 3 funds on a month-on-month basis, improving gross sales volume.

Even if I take my sales guys, I ask him how is the business going, he will say my underfund -- focus fund offerings, we are seeing improvement in gross sales, which is nothing but the language of people is coming in, I'm saying. Under the last, which I think I'll ask Prakash to answer

[Prakash Bhogale, executive]

So the funds in the SIP AUM for this quarter is 57 -- INR 57,543 crores, and you ESOP is INR 6.6 crores.

[Operator]

Our next question is from the line of Abhijit Sakhare from Kotak Securities. .

[Abhijeet Sakhare, analyst]

Sir, you mentioned on SIP front, you mentioned some sort of stagnation at an industry level -- so is it possible to share some color maybe for ABSL or at an industry level in terms of what is the nature of the SIP closures or the slowdown that you're seeing whether it is really the recent additions that have happened in the last 1 or 2 years that is now sort of seeing some redemptions or is it really the old book, which is sort of booking some gains because of market gains and sort of relatively more healthy in nature?

[A. Balasubramanian, executive]

So [indiscernible] when the -- what has been coming in the last 1 or 2 years, especially the millennials, where we have been seeing some deep technologies for the -- as we went for the industry as a whole. The old book generally, they don't redeem, they stay invested for long term, given the fact they have gone through the cycles, the experience is good. And in SIP, generally, there is no tendency to book profit. Therefore, that, I think, is more or less continues, mostly the online platforms whatever as you have seen, the [indiscernible] of demat closures, right, in the demat market. Yes, similar trend is also being witnessed as for as the millennials [indiscernible], that's been the general trend that we have witnessed .

In fact, the AUM that has been coming to the MFDs and generally, their tendency for long term is high. The third area where we have seen general drop even for us, we've seen a marginal drop in SIP in terms of cancellation, only on 1 or 2 schemes where, maybe the performance will not have been through the satisfaction of the investors, despite they being invested for long term. We saw some kind of closure on that. which I see is something which is not unique toward general industry trend we always seen even in the past as well. That's something we drive it through the we call -- we have a system called SIP win back and how we can actually call back the customers, make them understand this SIP [indiscernible] performance is something [indiscernible] takes care. If you go with the principle of the SIP we have bee of investing, that's something we make people understand again and again. If performance is bad, therefore, retain -- that doesn't mean you'll be able to catch up rather listing in times can go to do the catch up given the fact they all put an effort to turn on the performance also on those schemes as plan.

So that's something we try and do it through the call win back kind of strategy that we have.

[Operator]

[Operator Instructions] We have a follow-up question from Mr. Prayesh Jain from Motilal Oswal. .

[Prayesh Jain, analyst]

Firstly, sir, it's more of a strategic question. Is there a customer behavior saying over the past, say, 2 or 3 years in the B-30 where the going they are doing top [indiscernible] like we've seen an online broker or discount brokers kind of getting into the distribution more aggressively. So is there a different approach that even the AMCs, like you guys can adopt and direct reach -- outreach can help you scale up AUM there. Is there a different customer behavior that can -- that is expected here, that has been seen in the last couple of years?

[A. Balasubramanian, executive]

Prayesh. I think the [indiscernible] is when I go back to 3. Bit a bit special attention was given -- by way of giving extra incentive to the markets Since the time the extra incentive has been stopped, we have seen a reduction both in the increased customer addition as well as an increase in AUM from the B-30 market. That's something which I have witnessed as a change in trend, whether it is the large fund houses, small fund houses, that's there.

As far as the digital platform concerns, of course, technology usage is not today restricted only to the urban cities, even rural India is not -- a semi-urban India or maybe most of the cities, which are well penetrated, the usage of technology platforms have been raising and some of the platforms we have come -- have been increasing their reach to the market. Naturally, the digital onboard or transaction coming from the deeper part of location bit of cities also have been raising.

One of the trends that, of course, normally witnessed in the -- in these platform is they normally give higher weightages for recency of performance and also give -- they don't look at the schemes that they do by even in our own case, I have seen a large flow is coming in our Digital India fund about 6 to 8 months back when the performance was extremely good, and that is all coming through the online platform. we saw inflows coming in our infrastructure fund because the performance are very good between the benchmark by the substantial margin.

And we saw that -- I think I see online platform provides their own differentiate between semantic versus the regular schemes. That's something is a trend I see. In fact, we identified firepower schemes which fall in semantic category, but diverse with equity portfolio, but the performance has been extremely good. Then we also felt that maybe as a fund house, we can actually position this kind of product as far as allocation of investors and making it available in the online platform. But this is something which I see as a trend in online platform and also behavior of buyer behavior, I would probably say giving more importance for this kind of thing. But otherwise, I don't see a significant buying behavior changing or maybe selling behavior of the changing.

[Prayesh Jain, analyst]

And sir, you mentioned that there is a movement from target maturity funds to floater funds. So how does that impact our [indiscernible]? And do you think that this could further move to longer duration asset, say, possibly 3 months, 6 months down the line there on the trajectory of interest rate is more clear?

[A. Balasubramanian, executive]

Yes. Basically, the wage [indiscernible] even in the FMP days we have seen this. Whenever these gains come for maturity, we give the rollover facility to investors as for the regulation is permitted where the investment can continue for long term. In fact, we tell most of the investors. If you don't need this money in order to avail the longer-term tax benefit, which otherwise you'll lose it if you redeem and put the money back again. So we always increase investors to stay invested in whichever scheme to which they switch and stay for longer term as much as possible to postpone your -- the tax unless the needed money. This is something we normally [indiscernible] as an advice they always give to the investor, rather, we give this insight. Basis which if you see is when the money moved from target mature defined with [indiscernible] about 20 basis points in the floating rate fund or [indiscernible] as their funds.

But naturally, anything other than [indiscernible], the target that we have is really had than the target maturity fund, therefore, highly speaking, it should lead to an increase in margins on such kind of switches. We also increased the switch should be idly speaking, should be 100% unless until the investors need the money during that period of maturity. This is what we normally do but in our case, we see roughly about 60% to 60% success in terms of that money moving to the funds, which we ideally position for the [indiscernible].

[Operator]

[Operator Instructions] Our next question is from the line of Mohit from BOB Capital.

[Mohit Mangal, analyst]

So just 1 question, if you look at the market share, we have reversed the trend and now we have seen an increase in the market than the overall -- but if I look at equity, we have seen a little bit of decline and there is a trend that is going on.

Any special steps that we take to see that equity AM also increases going forward? .

[A. Balasubramanian, executive]

Sure. Thanks, Mohit, for asking the questions. In fact, we did go through some period of continuous decline, especially in [indiscernible] where the performance did have an impact on our growth. There's no doubt on that. In fact, the steps that we have taken in the last 6 to 9 months, as I mentioned earlier, both in terms of the shuffling of responsibilities on the team within the existing team and giving emphasis on more opportunity actually to manage the fund. And can you have a responsibility for some of the fund manager is going to take some other responsibilities, basis which brought some changes that's definitely reflecting on the performance improvement that we have seen on the 1-year and 2-year and 3-year basis.

Both with respect to the competition, peer group as I call it as well as to the benchmark. And that changed as the impact has created some of possibility in terms of our first level of discussion which highly seeking should help us in getting in more momentum on the equity space, which is what gives me confidence that the changes that we've brought in, the level of communication that we have to step up and more level of push on the ground level, which currently is being done unless we sound positive in the market, definitely, the overall momentum cannot be built. I'm quite happy first quarter business [indiscernible] more than I have build. I believe, speaking should help us in more in the direction.

[Mohit Mangal, analyst]

Great. Yes, perfect. Sir, secondly, I mean, what is -- what are the speeds that you are intending to launch in financial year '24. I mean specifically on the thematic side, is there any pipeline or if you can name few of them?

[A. Balasubramanian, executive]

There is 1 fund where we already got an approval which, of course, we have to look at the timing of the launch, which is the logistic fund under the thematic category. We got the approval and we'll have to, of course, plan the launch maybe in the second quarter if everything goes well. But in addition to that, we have of course, few products on the AIF side, as I mentioned earlier, the AIF side, perhaps there has been a good experience in buying our PMS products.

And those products are now also being offered under the AIF side that we see some momentum coming in. And third, which I mentioned in my opening remarks, we have launched first time ever in the country as a fund in Gift City, where all of us individual can put the LRS, and LRS limit is [indiscernible and all of us individuals can put in India. And that's something we are now going aggressive in terms of promoting it to invest in global markets using the LRS limit, which also should see some traction. The initial pillars are very good, and I don't have to put a number at this point of time.

Going with the feel, it looks like it may also see somewhat of a good traction, both in terms of customer base as well as the AEM, except that we have a constant here that minimum ticket at INR 1,20,00,000 crores. Here is the minimum ticket pays one have to put, therefore, predominantly helping building HNI can base in this space there.

[Mohit Mangal, analyst]

Lastly, anything on the branch expansion in this year, do you intend to increase your branches? .

[A. Balasubramanian, executive]

See, I think incremental branch expansion, we are doing it jointly with Aditya Birla Capital, which we call it as one [ ABCD ] branch. So we have to start prolonged strategy, one, existing branches, how we can collaborate with [indiscernible] branches. Therefore, we all become 1 as an ABC as a strategy, that something has been working quite well in terms of getting more customer traction in terms of doing [indiscernible] sales. I'm sure more you will hear that as we start seeing the real outcome of that.

And second is, wherever we have identified an M&E market about [indiscernible] location that we have -- some of the branches are matured in terms of size. We're also looking at opportunity of converting them into a full-fledged branch. As we convert them into full fledge branch, we'll actually add more emerging market, which [indiscernible] as an ongoing process there.

[Operator]

Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments.

[A. Balasubramanian, executive]

Thank you, everyone, and thank you for tuning in. And with this, we conclude our Q1 FY '24 earnings call. And do feel free to reach out to our IR Head, Prakash Bhogale for any queries that you may have. Thank you.

[Operator]

Thank you. On behalf of InCred Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.