Aditya Birla Sun Life Amc Ltd

NSE:ABSLAMC

Earnings Call Analysis

Earnings Call Transcript 2025-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to Aditya Birla Sun Life Asset Management Q1 FY '25 Earnings 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]

Yes. Hi, and good evening, everyone. On behalf of InCred Equities, I welcome all to Aditya Birla Sun Life AMC Q1 FY '25 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-Investor Relations. We are thankful to the management for allowing us with this opportunity.

And I would now like to hand it over to Mr. A. Balasubramanian, Managing Director and CEO of Aditya Birla Sun Life AMC, for his opening remarks. Over to you, sir.

[A. Balasubramanian, executive]

Yes. Thank you, Jignesh, for the introduction. Good evening, everyone, and thank you for joining us on today's investors call. I trust you all have had a chance to review our earnings presentation, which is available on both the stock exchange and our website.

Let me begin with the economic outlook and update on the mutual fund industry front before I give an update on our quarter 1 performance. The global economy has performed better than expected, even as uncertainty on the geopolitical front continues. There are looming political uncertainties with some critical elections yet to play out. The risk of recession that we used to have decreased, and the global economy has shown resilient to higher interest rates as well.

The macroeconomic outlook for India remains broadly positive. The Indian economy grew by about 8.2% in FY '24, higher than expectations. RBI projecting the real GDP growth for FY '25 anywhere between 7% to 7.5%. The key contributors to the economic growth include significant government spending on infrastructure, driving manufacturing sector and a strong domestic demand, as you know, [indiscernible] .To reflect specifically on the union budget announced earlier this week, we feel it is aligned with the vision of building a self-reliant Bharat, focusing on the critical drivers such as MSME sector, agriculture, manufacturing and the strong impetus to job creation and skill development that can propel the country to the next level of growth.

The focus has been to keep the fundamentals strong, capitalize the pocket of opportunity and not deflect from fiscal glide path as well. The budget did not have any specific announcement for mutual fund industry, except the marginal tinkering that has been done in the government banks.

The increase in government taxes may not dampen, my belief is, on market sentiment, also have a negative -- significant negative, significant impact more than the market on the mutual fund industry. The rationale is that the final wealth that has been created in the country was recently helped make the additional tax burden relatively minor for most investors. All of our investors typically base their divisions on potential returns and economic growth rather than solely on tax consideration. And then the equity market has consistently outperformed global counterparts, represents a strong fundamentals of Indian economy and the earnings potential of the company's [indiscernible] factors.

There will be some earning consolidations going ahead, but the country's strong structural drivers and economic fundamentals remaining intact. There will be continued participation in Indian equities. Given India has a fiscal health, one can expect rating upgrades for the country, which will also be advantage for the Indian bond market. With respect to the mutual fund industry, as of 30 June 2024, the mutual fund industry quarterly average AUM reached INR 50.96 lakh crore as compared to INR 40 lakh crores last year around the same time, growing 37% on year-on-year basis.

During the quarter, the mutual fund industry witnessed equity net sales around INR 1,40,000 crores through new fund offerings and existing funds. In fact, the NFO collection in the equity fund was about INR 23,200 crores majorly coming from sectoral, thematic funds. The industry SIP flows grew 44% year-on-year from INR 14,734 crores in June 2023 to INR 21,262 crores in June 2024. The total number of mutual fund folios stood at 19 crores with an increase of 28% year-on-year, the unique customer base around 4.7 crores. The individual average AUM grew by 46% year-on-year from INR 28.67 lakh crore to INR 37.47 lakh crores and contributed 61% of the total AUM. B-30 cities with an average AUM of INR 11.13 lakh crore accounted for 18% of the total AUM.

As far as the [indiscernible] mutual fund FY '25 has been a special meaning as is marked a milestone for our company as we celebrate 30 years as an asset management company and a key player of Indian mutual fund industry anchored by our unwavering values, rich legacy and exceptional team, we have built on the strong foundation and endeavor to be formidable mutual fund industry. We have navigated market dynamics with agility and innovations focused on our core strength and made strategic moves to address areas of enhancement in order to build the business for that.

The efforts have come together to build momentum, which are quite visible for the final quarter of last fiscal as well as has further gained pace as we move to the current quarter. This is reflected in the strong momentum of our AUM numbers and growth in SIP numbers and a healthy retail growth. We posted the highest ever quarterly profit and witnessed a substantial increase in investors folios across various channels during the current quarter. We had a successful NFO collection, as well as Sun Life Quant plan mobilizing assets around INR 2,400 crores. It is now one of the largest funds in this category. And for us, also, it was one of the highest collections we have had in the last number of years. We also witnessed improvement in contribution from B-30 cities. We're not just seeing an increased growth contributions of corporate and institutional sales, but also a rising trend in contribution through digital platforms and distributors in general.

Our business verticals in the alternative segment has always showcased a healthy growth driven by AIF, PMS product launches and the AUM growth thereon. Passive business has also grown progressively through new product launches and scaling up the existing products. This progress is a result of building a robust sales ecosystem, enhanced management at the relationship manager level, increased satisfaction of service effectiveness and positive sentiment towards performance and improved digital experience have all contributed to a positive sentiment and overall improvement in the overall AUM numbers.

Moving on to our business numbers. Overall average assets under management including alternate assets reached INR 3,68,000 crores, definitely 19% year-on-year growth. Our mutual fund quarterly average AUM reached INR 3,40,000 crores with an equity quarterly average AUM about INR 1,60,000 crores [indiscernible] numbers during the quarter further moved up to cross INR 1,300 crores mark, showing a 39% year-on-year increase from INR 987 crores in June 2023 to INR 1,367 crores in June 2024. We add around 8.39 lakh new SIPs, mainly we have seen 3x increase from the previous year. We have witnessed a healthy growth in our investors folio, have added around 9 lakh new folios during the quarter bringing our total serviced folios to 94 lakh. Our quarterly folio growth was 9% compared to the industry 7% growth.

The alternative segment, PMS and AIF remains our key focus area. But as part of our alternate business building at site, we have strengthened our team and appointed a head of [indiscernible] and aim to offer the variety of products including category 2 or category 3 alternative investment funds and fund raising is underway for the ABSL India Special Opportunities Fund, which has been one of the growing fund in the PMS category, along with other several products that we have in the pipeline. By establishing our presence in GIFT City, we aim to manage and attract overseas investments into India to meet the growing needs of NRI and foreign investors. They're using GIFT City to launch variety of innovative financial products, including a product which is ESG Engagement Fund for Sustainability, index linked funds and thematic funds. These products are designed to meet the evolving preferences of global investors and tap in our niche market.

We have launched and currently under fundraising plan for funds for ABSL Global Emerging Market Fund that invests in emerging market, [indiscernible] of close to about INR 400 crores. With the [indiscernible] closing fund in the next few months, ABSL Index Linked Fund that we are launching for [indiscernible] India. At the same time, we also launching a fund with India Opportunity Fund [indiscernible] NRI investors in India. We're also preparing launch funds in GIFT City including ABSL India ESG Engagement Fund. This I had highlighted in the past that ESG Engagement Fund but finally, we are seeing the big capital coming in. And this fund will take off in the next quarter in order to drive fund from rest of the investors in India.

The same way, the Flexi Cap Fund, Global Bluechip Fund -- [indiscernible] being created to attract NRI investors in India to the GIFT City. On the passive front, as of June 2024, our passive assets totaled to approximately INR 29,900 crores. Our customer base has grown to about 7.5 lakh folios. we have a diverse product portfolio about 44 products. At ABSLAMC our focused driving growth in the passive segment. We have enhanced our passive core team, we are bringing in a Head of Passive with international experience, having worked with some of these funds in U.S. which focused only on passive. And we're also looking at further expanding our product offering to capture the opportunity in the thematic segment both with the passive route as well as the mutual fund route.

Moving on to financials, we at ABSLAMC are happy to inform you that we have achieved our highest ever quarterly profit in Q1 of FY '25. This has been driven by improvement in the asset mix, overall asset mix and a strong focus on cost management. Our total revenue is about INR 489 crores versus INR 389 crores in Q1 of FY '24, up 24% year-on-year. Our profit after tax is at INR 232 crores versus INR 183 crores in Q1 FY '24 up 26% year-on-year. Impact is also driven by improvement in overall operating profit that we have witnessed during the current quarter, which is due to the mix of assets that are changing.

With this, I would like to conclude and open the floor for any questions that you may have. I'll be joined by Parag Joglekar, who is our CFO; and Prakash Bhogale who is our IR in-charge to take any other questions that we may have.

[Operator]

[Operator Instructions] The first question is from the line of Lalit Deo from Equirus Securities.

[Lalit Deo, analyst]

Congratulations on a good set of numbers. So my first question is on the SIP flows. So we have seen a good ramp-up in our SIP book and as well as in registrations. So could you highlight like the channels from where we are receiving the increased interest with the same. And also I wanted to understand that this SIP flows also includes the systematic transactions. So could you just give us the breakup between the SIP and SIP city, sir?

[A. Balasubramanian, executive]

Thanks, Lalit. I think with respect to the SIP flows, largely are seeing -- the flow coming from one MFD channel, which is our traditional channel than the digital channel, then come from the rest of the channels, including the direct. We have seen contribution coming from all the -- I think majority of the contribution has been coming from MFDs and digital channels. With respect to the breakup, I don't have that breakup. But predominantly large proportion of the flows as far as in the follow-on SIP, less number of [indiscernible], again, we see that one of the opportunities for us to push aggressively in terms of improving the overall number for that higher level. But large contribution coming from the SIP route.

[Lalit Deo, analyst]

Sure sir. And sir, like how healthy the trend in the -- apart from the SIP, how has been our trend in the lump sum flows also in the equity side?

[A. Balasubramanian, executive]

Lump sum flows, actually, we got visibly good lump sum flows in our NFO that we did predominantly there we would have got roughly about INR 20 crores of our SIPs, and rest of the flows came through the lump sum. The existing funds, there are few funds where we are seeing flows pure on the basis of the acceptance both in the large cap category as well as the thematic category. There, the lump-sum flows have been improving. But predominantly large flows have been coming with the SIP.

[Lalit Deo, analyst]

Yes, sir, on the OpEx side, sir, besides the NFO -- besides launching NFO in this quarter, our other OpEx has been remained broadly stable -- has remained broadly flat on a Q-o-Q basis. So like for the next 2 years, how are we looking at the -- on the expenses side? And can you also give us the guidance on the ESOP expenses for FY '25 and FY '26?

[Parag Joglekar, executive]

So the expenses, mainly we have been generally projecting that we will -- the expenses will grow in the inflation plus something. So maybe the cost of employees will be in the range of around 10%, 12%. Other than that, other OpEx will grow in the range of around 10%, 12%, which is administrative OpEx. So that is what generally our target will be and that we will be tracking.

[Lalit Deo, analyst]

And sir, on the OpEx...

[A. Balasubramanian, executive]

I mentioned, Lalit, as far as the OpEx concerns, while we of course continue to do branch expansion, we'll keep that as one of the drive -- especially in the emerging market, we are expanding further. Second, with respect to the people, whatever I have been communicating most of the recruitment related at the senior level, they are more or less same. And we might still further strengthen the team on a few areas, especially in the direct and as well as on the alternate business. These 2 areas will further build -- and even an offshore and we are seeing some of momentum coming back especially towards India as well as even we're also seeing some kind of green shoot as far as offshore business is concerned.

However, these are 3 areas where we need to fill. Some people-related expenses we will have to take. But broadly, this is an approach that we will take. But as Parag mentioned, we'll keep a close watch in terms of in the productivity. Therefore, increased productivity will keep the OpEx under control.

[Operator]

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

[Dipanjan Ghosh, analyst]

I hope I'm audible. Firstly, if you can give some color on the flow movement -- net flow movement. for your equity assets, excluding the sectoral funds, I mean, you have a large chunk of sectorial funds. And obviously, the industry has seen strong momentum in that. But if I were to see the flow movement -- net flow movement, excluding the sectoral funds, how that would be? And from a quarter-on-quarter perspective, how has the trend been in terms of market share on that particular chunk of the business ex of sectoral funds?

Second, you mentioned that you had growth in other OpEx and per cost employee will be around the 10%, 12% ballpark number. Sir is this for FY '25? Or you expect this to kind of remain a steady state guidance going ahead also? And lastly, 3 bookkeeping questions, if you can give your ESOP expense for the quarter, employed for the quarter? Yes, that was the last question.

[A. Balasubramanian, executive]

Yes. With respect to your first question in terms of flows, largely, of course, net sales between the thematic funds which I just mentioned about. That's something PSU Equity Fund, Pure Value Fund as well as on the Quant fund that you have raised. As far as the diversity equity fund concerns, predominantly the flows are more in the main categories such as large cap and flexi cap kind of funds. But again, the large component of the flows, I would say, is coming to the thematic funds as it stands today.

But overall, though, of course, net sales numbers generally, we don't disclose it. But otherwise, broadly, the trend has been improving. But however, the market share -- it's a function of significant manager has come into the industry, especially in the current quarter, which we mentioned about [ INR 1,40,000 crores ] and also the differential product performing differently, depending upon where you are present -- large present. And given the fact that a certain segment in the market has been giving a significant outperformance, in that segment, we as a fund do not have a dominant percent.

To the extent that we have seen the market share improvement is not coming as much as we would have desire to be, but however, various steps that is being taken, such as the successful closure of NFO, the successful push in terms of SIPs with a clear target the higher numbers. And there's one area where I'm seeing an improvement in terms of addition, is the new customer additions and industry. Now our share has been improving. And the same way on the SIP new addition as well. And compared to the industry, I'm seeing an uptick as well as increase in gross volume as a percentage, which is a reflection of the productivity.

All these things I believe would eventually lead to improvement in the market share, not necessarily will have a significant -- significantly it can move unless we see very large flows coming in few of the NFOs. Of course, we do gun for it. But given the operating model that we have, I think these are some steps that we are taking in should help in terms of moving up in the overall attrition -- overall contribution of the growth.

With respect to OpEx, I'll ask Parag to give a sense and ESOP.

[Parag Joglekar, executive]

So defining the ESOP cost is in the range of around INR 3-odd crores and -- which is already part of the employee benefit cost. And what was the other question? The OpEx, yes, the guidance is more or less 10% to 12%. That is what we are looking at over the period. As Bala also mentioned, there may be some recruitment and there may be some activity on branch expansion will happen. But we will try to be -- we keep a close watch on the overall expenses. to ensure that it is under control. And number of employees as of June is 1,520.

[Dipanjan Ghosh, analyst]

Okay. So Parag sir just a follow-up question is the guidance of cost, is it for FY '25 -- or in terms of, let's say, when the market kind of stabilize a bit in FY '26 or '27, assuming it stabilizes. What sort of flexibility do you have in terms of -- because obviously, you'll be adding employees. I mean if I understand correctly, last quarter, you added around 70 employees. So suddenly, if markets were to stabilize, what sort of ability will you have to control your overhead? Just wanted to get some sense on that.

And just one more question if I can chip in, if you can give some understanding of your yields on equity for fresh versus back book and how the payouts are shaping up?

[Parag Joglekar, executive]

Especially on expenses, there are -- some of the expenses are variable, obviously. But majority expenses will be fixed like employee salary, rentals and all that stuff. But there are expenses which are variable in nature. And depending on the growth of the overall AUM and overall business, that can be tweaked to a certain extent. But the majority will be on the fixed side of the expenses. On yield, equity is in the range of around 68 basis.

[A. Balasubramanian, executive]

On the new...

[Parag Joglekar, executive]

And new, generally, depending on scheme to scheme, but we generally share around 65% of our DTR with the distributors. So yield on new will be lower than the overall yield on the stock. .

[Operator]

[Operator Instructions] The next question is from the line of Devesh Agarwal, IIFL Securities.

[Devesh Agarwal, analyst]

My first question is the tax changes that have been made in the budget. How do you think this would impact the inflows into the mutual funds of different categories? And do you see that post March '25, the AUM that is there on the [indiscernible] schemes, can that see a churn to others too?

[A. Balasubramanian, executive]

Yes, I think the way we have seen tax changes as far as the equity is concerned, no negative impact. The increase in the capital and tax [indiscernible] impact as well as the flows concerned, largely flows have been coming, keeping in mind the longer-term investment needs of people. Therefore -- plus again being pushed to SIPs for laurel coming to the [indiscernible]. Therefore, I don't see as far as equity is concerned -- unless we see the equity market down volatile, therefore, is a slowdown. But nothing related to the budget, I would say.

As well as equity concerned, it's status quo. Nothing major as -- though we've been expecting some steps will be taken to promote the income schemes in order to develop one market on one side as well as create alternate product for significant equity flows have come as a cushion. But I have not seen, but it does not have any negative impact, per se. But at the same time, there are certain asset classes which are now coming into the long-term capital impact such as region in which gold, it's now private equity taxation. I think these are some of the products potentially could emerge, may not be necessarily immediately but, can potentially emerge including hybrid products could potentially emerge to get the retail investors as part of our onboarding exercise. That's something internally we see could be an opportunity. .

As for the fixed income concerns, as the expectation of interest rates are starting in, which I think we would probably see they are coming in, therefore -- and the equity market volatility [indiscernible] then, then we'll see the income flows also begin. But at the same time, what we are doing is within the fixed income phase, well, of course, the -- in the mutual fund phase, we continue to keep our dominant position. We're also building a well product offering on the alternate side with the fixed income oriented schemes with higher yield, return expectations than your traditional investment expectation in the alternate space by way of credit opportunities fund as well as real estate yield fund. These are the 2 that we are doing it mainly to cater to the HNIs and family office needs there.

[Devesh Agarwal, analyst]

Right, sir. And the same cost -- recent consultation paper that [indiscernible] floated in terms of a new category of investment, which is the INR 10 lakh and above. What are our thoughts around that?

[A. Balasubramanian, executive]

If there is something new, there's a segment of people who otherwise play in the market directly using the auction in the market, [indiscernible] market. And potentially the new product can be created by a mutual fund. This will take some time, but definitely it's something innovation is coming in, which SEMI has been thinking about that kind of protect with any merit for -- to be part of the mutual fund. [indiscernible] scenario if this comes and of course we will have to build capability in terms of using the derivative market to have this kind of product and also help in visiting our retail investors. It's something -- there is a phase but need to be dedicated where we have done for other products for one to get higher participation there.

But as it comes the funds, the way we have been building capability in various other product segment, we'll do a similar one as well. But right now, too early to take a call in terms of what is the real impact that one can mutualize on this. So definitely, this kind of product will become one of the customer aggregation tool so that eventually, they become part and parcel of the main mutual fund scheme.

[Devesh Agarwal, analyst]

Right, sir. Even I was saying on the similar lines. So for this scheme, if at all this comes to retail fund, would we need to have a completely different distribution channel, which can kind of force such high, what you say, per client AUM?

[A. Balasubramanian, executive]

Not necessarily, I think. I think, ultimately, one of the area having MF industry has beautifully adapted and articulated this asset allocation model. And it's like the way we are now seeing thematic funds also now drawing the attention of investors as part of asset allocation. I think it will fall in the same approach, so to speak.

[Devesh Agarwal, analyst]

Right, sir. And sir, can you also share the yields on your debt and liquid funds?

[A. Balasubramanian, executive]

Sure. Parag?

[Parag Joglekar, executive]

Debt is in the range around 25, 26, and liquid is being around 12, 13 basis.

[Operator]

[Operator Instructions] The next question is from the line of Kunal from Carnelian Asset Management.

[Unknown Analyst]

I had questions on asking returns, right? So basically, we're seeing improvement in 1 year returns across our main equity schemes. If you can help elaborate if you wish to a little bit about -- more on the series if you have done the investment team side, how do we add -- and in our interactions with distributors now since 1 year, scheme performance has improved. How do you see the traction also building upon that would be really helpful. .

[A. Balasubramanian, executive]

Thanks, Kunal. The way we have -- one, I think if you have to look at the investment side, one is the new additions that we have made to the team; and second, the existing team members who have been extremely passionate about managing funds and therefore create success. So as we speak today, about 65% of funds have been in the Q1, Q2 performance from across the various categories. And second is the way I look at the -- vis-a-vis the competition how we are also in the peer group, we are also performing in relation to this. As you rightly pointed out, the performance improvement was not just coming in 1 year. Now it's even coming in the longer term. That is something has been being one other mandate investment team working on it.

Second is the Quant fund NFOs, also when we did our complete road show across the country did have a quarterly impact, one, in communicating what we have done and what is being done and the investment team both from a team processes and whatever step that has been taken by the investment team to deliver -- cater to the investment performance, that is being well appreciated. And second is, in terms of communication on the same thing, it's also being done effectively by identifying 4 or 5 products, which can definitely get scaled up for us given the fact we have a longer-term track record in terms of performance, existence, long-term track record, people have made presumably good money in each of those teams. How do we get that communication done effectively to increase level of engagement.

And the last, of course, is the retail focused -- that capital retail focus they have brought in, in terms of increasing the productivity of every RM in every location. That's also being monitored very closely, the SIP improvements that we are seeing, new customer acquisition we are seeing an improvement, always an outcome of the increased efforts that being put by the team on the retail side. And the process has begun. And with respect to investment, wherever the gaps are there in terms of individual having capability -- manage certain segment of the market cap, that also we identified and we'll probably have somebody onboard to -- on the mid- and small-cap category, where we felt probably have to further strengthen our team that also we have taken steps to get somebody onboard.

So those are some of the things that is also being appreciated internally as well as the sales team so that they can embrace the changes and have a little bit of engagement in the marketplace there. And that's something I see as a -- second, we also had already employee made being [indiscernible] just to reenergize the team, communicate very clearly in terms of what we are doing and how we are trying to do. And so that [indiscernible] team members embrace the change that you are bringing in order to go the next level of growth. We are also, of course, being appreciated by the entire employee force, that's something we had to do to ensure that the strength of the ABSLAMC, is built over a period of time, is understood by people. At the same time, the plan that we have because the size is also being adapted people across the board so that we get the contribution coming from every employee from every location.

[Unknown Analyst]

Got it. All right. That's really helpful. Also, if I understand correctly, we have made a few changes in the team and hired a few people over there as well. If you could help a little bit understanding how is that panning out? And if you want to share the new hirees what's the focus engagement? Any changes out there also could help.

And one more question to this. I'm not too sure how meaningful it will be in the total scheme of things. But we were also talking about cross-selling within the ABG Group itself, right, at the parent level. So are you seeing any traction there? How is that panning out? And if at all, it will be very meaningful in terms of [indiscernible] issue in the overall scheme of things.

[A. Balasubramanian, executive]

What's the first question, Kunal, in response to the [indiscernible], is it? .

[Unknown Analyst]

No. In respect of the sales team, right? Also, there have been few hirings that has been made.

[A. Balasubramanian, executive]

I got it. With respect to the sales, of course, we did some rejuggling generally in terms of more people movement. That's something we did with the external person coming in with experience on managing on the wealth side as well as customers connect. And that's something is done. And of course, incremental changes more would be at the support function. We have created presumably good strength in terms of our digital platform and the product and business development side.

We have identified 3 areas of opportunities to further strengthen. One such opportunity we have been driving to energy market opportunities. When we set it up about few years back, we have seen a significant contribution coming from the deeper parts of the location. We had a specific focus. The team was driving it with 100% energy going only towards building that business. That's something we have reset it up as we have been factored.

Second, direct sales. While we have about 35 member team, we, of course, have also been thinking that an exclusive, sharper focus that we can bring by having people who would private with 100% rigor and start out to reach the thing. And third is within the institutional business, we've been extremely successful in building our institutional business to have a higher market share. And the institutional business team always highly capable to reaching out to the family offices as well as ultra HNIs. That's something, again, we have filled up as a separate target that they should take in order to further expand relation that we have [ LCM ] business. Therefore, we'll be able to relate that benefit. That's something we are doing on -- few other changes that we are looking at them.

Definitely it's working quite well in terms of having a sharper focus on execution. And last but not the least, the NRI one segment where having created space in the equity as well as creating a presence in Dubai and other user platform we created. We also feel that we can bring in more sharper exhibition focused on NRI customer acquisition. So it will be too early from an output expectation point of view. But definitely, we can expertise that in that area could also help in getting NRI customers as we start setting up a fund of fund in equity. That's something we do work in terms of expansion of the business there. With respect to the other question, second question was on the, I can wish all on the...

[Unknown Analyst]

Selling within the ABG Group.

[A. Balasubramanian, executive]

Yes. On the cross-sell, upsell, one of course since the time -- there are 2 opportunities. One, of course, PIFA. The second is ABCD. We have a separate team of people -- not separate team of people, with the existing team to have, yes, the special drive that needs to be given both for the PIFA. In fact, we are seeing traction coming in that, I'm seeing month-on-month the number showing an improvement on the base of 2 things: one, a clear target setting both on customer base as well as the AUM growth coming from PIFA. Second is the leads that come from rest of the businesses, in the direct customer business, and looking at that conversion ratio from the individual AMC business.

What we have seen, some of the attraction in terms of conversion of that into our AMC customers. At the same time, in the ABCD which is the one digital platform super app that has been created by ABC. Also, we are seeing some of our product position that we have. In fact, we are seeing visibly good traction coming on our Quant fund NFO that we did and the similar promotion is also being done in some of our existing products. So as the traction increasing in other the ABCD app, we are seeing actually increased participation coming in that. So I can only say that in fact we have a number on a month-on-month basis and we review each month, we are seeing an improvement with itself a sign of that we can contribute in addition to the push that we are giving at the AMC level.

[Unknown Analyst]

Got it. Cool. I mean, wishing you all the best and also congratulations for your reappointment, sir. .

[A. Balasubramanian, executive]

Thanks, Kunal.

[Operator]

The next question is from the line of Abhijeet from Kotak Securities.

[Abhijeet Sakhare, analyst]

My first question, actually, I wanted to clarify on the equity yield, I missed that number, actually. Was it 68 basis points or 60 basis points?

[Parag Joglekar, executive]

68, Abhijeet.

[Abhijeet Sakhare, analyst]

68, okay on that. And then just on this point, again, like generally, like how do you see the distribution commissions evolving given that some of the payers have talked about some scope for rationalization? So in that scenario, what would be our thought process given that we are now in the process of getting some of the existing larger funds to capture higher share of flows. How would we deal with a situation like that?

[A. Balasubramanian, executive]

The approach we are taking, Abhijeet, we have 2 agenda in front of us. One of course build a scale for that. And second is improve the overall customer business strategy with respect to the equity. So therefore, for us, we can't go to the other extreme, while paying too much, given the fact we also have responsibility to deliver good profit. At the same time, we also cannot go down. They take a call that we have completely rationalized it and focused on improving the profitability. I think we'll take that middle part at this part time. And that's the course we have been taking as a fund house given the fact that we need to, one, work with distribution partners very closely to ensure [indiscernible] price grow.

And second, we also build our direct channel, other channel partners, including [ RIA ] channel partners where potentially the money could come where the cost [indiscernible] relatively low. But at the same time keeping in mind the overall aspiration that we have. We will probably take that middle path. And whenever, of course, we have to give a specific drive which may need some company we will have do, also we'll undertake given the fact that, that funding it could be seen as an investment. And therefore, in the longer term, it benefits that call also. We have been taking in fact, you would have seen in this quarter, we did give an advertisement in some of our funds. But we did feel that while we are doing a lot of things right with respect to the improving overall AMC growth. I mean we also spend the money on the brand building, that also we have undertaken as some of the exercise there. Therefore that's an approach we'll take, Abhijeet. .

[Abhijeet Sakhare, analyst]

And a question on close. So outside of thematic funds, would it be fair to say that on a net basis, let's say, the overall trajectory is improving month-on-month in terms of net flows that we are getting across some of the larger 5, 6 mainstream categories?

[A. Balasubramanian, executive]

Yes. No, definitely, we are seeing improvement, Abhijeet. Of course, we still have to do a lot more -- be satisfied with the flows not so much, so the improvement is coming, definitely no doubt. But we need to get -- definitely is changing in trend in terms of customer acquisition and of course there is improvement -- net sales improvement on these schemes. And this is something is being relatively number improvement. So all these things I think will keep on improving, and therefore, it lead to a higher net sales on our quarter-on-quarter with a total [indiscernible]. But definitely, the trend is actually changing, which is what we keep driving the team from a larger creation or success point of view.

[Abhijeet Sakhare, analyst]

Got it. And lastly, sir, you mentioned a few fund categories amongst the thematic ones. So I remember, value is one that you mentioned, apart from Quant which is an NFO. Are there any other major thematic categories where you're getting good flows? .

[A. Balasubramanian, executive]

See Digital India Fund has been [indiscernible] for us done very well, equity fund we are seeing good flows. We have seen good traction on that. [indiscernible] fund has done extremely well. Even GenNext fund where we've been officially going and telling that consumption team could be the one area -- we are even seeing some flows on the manufacturing front, though the flow is not as big as what you see in the NFO segment, but we are seeing some flows in that .

[Abhijeet Sakhare, analyst]

And sorry, one last thing. Is any other fund launches in the pipeline?

[A. Balasubramanian, executive]

We already have 2 approvals. One approved we already have, which is the Innovation Fund approval that we already have. We have one fund approval for defense fund on the index side which we intend to launch very soon. And we have few pipeline products for immediate launches. At the same time, we also have some products which have taken approval from the Board, which will be filed with the SEBI very soon. And so that we are able to have one or two at least products additional to help us raise fund, while, of course, pushing the existing products on other side. So that's the current pipeline.

Yes. Of course, we also have a product pipeline for our GIFT City both for outward remittance as well as inward remittance. For outdoor remittance, we already started 1 fund. The one which already started is coming to a closure by September end, where we already done about INR 400 crores from the LRS side. That fund will give me about 40 to 50 basis points additional revenue. And when this start, we have actually one more product which we are launching it, which is a global blue-chip fund that something which we already taken approval from IFSCA. That's something we are launching it for both LRS as well as for ODI investment that can happen to the [indiscernible].

And the one fund that we are creating for Indian flows, that's something, again, we are pushing it in addition to what we are doing on the domestic side. And all the products are meant for both HNIs and retail. Therefore, it could have an above effect on either side.

[Operator]

The next question is from the line of Dipanjan Ghosh, Citi.

[Dipanjan Ghosh, analyst]

Sorry, just one more question from my side. If you can give the SIP flows for the quarter.

[A. Balasubramanian, executive]

For the month, it's 13.67.

[Dipanjan Ghosh, analyst]

Would we have the data for the quarter by any chance .

[A. Balasubramanian, executive]

Yes, Sure.

[Parag Joglekar, executive]

It's around 3,700, Dipanjan. Hello?

[Dipanjan Ghosh, analyst]

Yes, sure. I got. So sir just on the -- on that, if I do back calculation, it seems for the month of April and May, your SIP flow market share is around 5.7%, which is obviously lower than your March exit. So normally, what we are seeing again for Jan and February your SIP market share was around 5.7%. So just towards the last month of the period, it seems that the SIP market share is kind of jumping in the last 2 quarters. That's the trend we have seen. So how should one really read into this?

[A. Balasubramanian, executive]

The way we see is, one, clearly the SIPs, we look at it from 2 angles. One, the registration of SIPs from a customer base which is coming where the average ticket size would be roughly about INR 3,000, INR 3,200 kind of thing, where we are seeing continues improvement. And second, within that, new customer acquisitions, which I mentioned about online platform, where new customer acquisitions also comes through that MFD platform, new customer acquisition. That is something we see as one. In these two components is the one which clearly is a focus in terms of building it up.

I think clearly, within the SIP, on an incremental registration basis, compared to the competition, the new customer acquisitions, how the share comes to close about 8.5%, 9%, that's the kind of number we are seeing. I think we have to look at from a combination point of view. I think 1 or 2 quarters, such improvement ultimately will make it more sustainable from an overall momentum perspective.

[Dipanjan Ghosh, analyst]

And sir, just on Abhijeet's question, you mentioned that your trends in thematic funds have been on an improving trajectory. But the gross sales number for the industry had also jumped multifold in the last few months on an absolute basis. But if I just look at relative basis rather than absolute because, I mean, the industry is doing, I'm assuming, absolute basis, everything is going up for every manufacturer. But if I just look at relative to peers, would you say that your ex thematic funds are kind of improving in terms of trend relatively rather than on an absolute basis?

[A. Balasubramanian, executive]

Yes, relatively definitely it's an improvement. Only with respect to thematic, you might also to keep in mind, all the NFO that have come into market is thematic. And we have fund house having created a presence for the last number of years. 30-year old player, I have got plus or minus as well. And we have a presence in thematic. We do get the rub-off effect as thematic funds comes in the market. Definitely NFO collections have been far higher in the thematic category compared to the earlier days.

So to the extent you may probably see the flows in thematic, while it is good, but lower than percentage to the industry, sales will be lower. But I think the way I look at it is trend change. I think, what's most important is the trend change that we witnessed in all parameters that we are looking at building is something, which is encouraging.

[Operator]

Ladies and gentlemen, this will be the last question. The next question is from the line of Lalit Deo from Equirus Securities.

[Lalit Deo, analyst]

Yes, sir. Sir, just one data keeping question. Could you also give the SIP AUM as of June end?

[Parag Joglekar, executive]

It is 77,000, Lalit. INR 77,000 crores, yes.

[Operator]

Thank you very much. Ladies and gentlemen, I would now like to hand the conference over to the management for closing comments. .

[A. Balasubramanian, executive]

Thank you, everyone, for joining. And with this, we conclude our Q1 FY '25 earnings call. Do feel free to reach out to IR Head, Mr. Prakash Bhogale for any query that you may have. Thank you. .

[Operator]

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