Aditya Birla Sun Life Amc Ltd

NSE:ABSLAMC

Earnings Call Analysis

Aditya Birla Sun Life AMC Reports Significant Revenue Growth Amid Increased Market Activity

Aditya Birla Sun Life AMC achieved a remarkable 33% year-over-year revenue growth, reaching INR 520 crores for Q2 FY '25. Profit after tax also surged by 36% to INR 242 crores. In the first half of FY '25, total revenue was INR 1,001 crores with a 28% year-on-year increase. The company is expanding its digital platform to enhance customer engagement and anticipates growth in its asset under management (AUM). Their focus on alternate assets remains strong, with a notable 66% rise, and upcoming fund launches are expected to further capitalize on market opportunities.

Strong Revenue Growth Amid Market Volatility

In the second quarter of FY '25, Aditya Birla Sun Life AMC reported a substantial increase in revenue, achieving INR 520 crores, which marks a 33% rise from INR 391 crores in the same quarter last year. Profit after tax also saw significant growth, rising by 36% to INR 242 crores. For the first half of FY '25, total revenue reached INR 1,001 crores, indicating a year-on-year growth of 28%. This momentum comes amidst a broader context of volatility in the equity market, with the global economy expected to grow by 3% in 2024 and India targeting a robust 7% growth rate.

SIP Dynamics and Market Share

Despite the overall market experiencing a 53% year-on-year increase in SIP flows, Aditya Birla Sun Life AMC has observed a slight dip in market share. The total SIP inflow for the quarter was approximately INR 1,425 crores, reflecting a 47% increase from the previous year's INR 968 crores. The company's focus on expanding its digital channels is vital, with digital platforms contributing 50-55% of SIP sales as they strive to enhance customer engagement and attract new investors.

Performance Improvement and Fund Flows

The performance of various funds has improved, driving increased inflows into key products like the equity flexi-cap fund and the multi-asset allocation fund. Approximately 60-65% of their funds are outperforming benchmarks, indicating a positive trend in investor confidence. Continuous enhancements to fund performance are expected to lead to stronger inflows moving forward, especially as partners and distributors begin to recognize these improvements.

Focus on Alternate Assets and Passive Funds

Aditya Birla is making notable strides in growing its PMS (Portfolio Management Services) and AIF (Alternative Investment Funds) assets, which increased by 66% from INR 2,300 crores to INR 3,900 crores. The firm is also expanding its passive fund offerings, with a diverse product range of over 47. This segment is evolving, and they anticipate launching additional funds in coming quarters to further attract investors.

Investments in Leadership and Technology

To support its growth strategy, Aditya Birla has strengthened its leadership team by adding a new Head of Digital and Data Analytics, as well as a Head of Marketing. This strategic enhancement is expected to drive innovation and improve customer engagement. The company's investment in technology is indicative of their commitment to adapting to the rapidly changing market landscape.

Infrastructure and Strategic Initiatives

The company’s GIFT City operations have started to gain traction, with plans to launch various products tailored for both domestic and NRI investors. The introduction of the ABSL Global Blue Chip Fund, among others, reflects their strategy to tap into new market segments. Furthermore, as interest rates potentially decline, Aditya Birla plans to promote its duration bond offerings, anticipating increased demand.

Guidance and Future Outlook

Looking ahead, Aditya Birla Sun Life AMC remains optimistic about maintaining a competitive edge through continuous evaluation of the commission structure and enhancing employee productivity. For the full year, they anticipate sustained revenue growth consistent with the 28% rise seen in the first half. Additionally, their aim to expand digital and traditional channels to reclaim lost market share will be critical in driving the growth trajectory in the forthcoming quarters.

Earnings Call Transcript 2025-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Aditya Birla Sun Life Asset Management Q2 FY '25 Earnings Conference Call hosted by Incred Equities. [Operator Instructions] Please note that this conference call 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. Thank you, Sidharth, and good evening, everyone. On behalf of Incred Equities, I welcome all to Aditya Birla Sun Life AMC Q2 FY '25 Earnings Conference Call. We have along with us Mr. A. Balasubramanian, Managing Director and CEO, and Mr. Prakash Bhogale, Head, Investor Relations.

We are thankful to the management for allowing us this opportunity. 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, and good evening, everyone, and thank you for joining us on today's investor call. I trust you all have had the change to review our earnings presentation which is available on both the stock exchanges website and our own website.

Let me begin with the economic outlook and update on the mutual fund industry. The global economy continues to be resilient and is expected to grow by healthy 3% in 2024. The global inflation has moderated in major economies, leading to the easing of monetary policies. We believe that this trend is easing our monetary policy will continue as we move forward, embraced by most sunbankers.

In India, the macroeconomic outlook remains solid, with the concert expectation of approximately 7% growth in FY '25, recent GDP data indicates a pickup in private consumption, supported by pickup and agro economy, India continues to be the fastest growing major economy the world, supported by progress economic policies and healthy macroeconomic stability parameters.

The abundant and well-distributed monsoon, rainfall, has fostered the positive outlook for agriculture output, enhancing rural income, a stabilizing food inflation, which will contribute to more resilient economies. With the overall inflation amount moderating, the RBI monetary policy committee recently changed its time from 12 hour of aeration to neutral, opening the door for a potential rate cut in the second half of the current fiscal year.

The government fiscal position remains robust, supported by strong revenue receipts. The external account continues to be stable marked by a low current account deposit and for exit reserves extremely high. The Indian market for the quarter ended September '24 was marked by a period of volatility and uncertainty. The resilience of China with meaningful using of policies as well as added to the volatility in the market.

We have witnessed the SIP flows being negative, increased participation from domestic industry investors and retail investors are the much needed stability in the market with the market moving in a narrow range. At the same time, we're on goal with a current quarter corporate earnings, we might see a slight moderation overall growth expectations. Therefore, within expectation of returns for the time to come.

With respect to the mutual fund industry, as of 30 September, 2024, the mutual fund industry quarter average AUM reached INR 16.21 lakh crores compared to INR 14.98 lakh crores as of 30 September 2023, growing 41% on a year-on-year basis.

During the quarter, the mutual fund industry witnessed net equity sales, excluding an expense of around INR 1,43,000 crores through a new fund offerings and inflows in existing funds. The total NFO collection in equity funds, in fact, were around INR [indiscernible] crores majorly coming from sectoral and thematic funds.

The industry SIP flows grew by 53% year-on-year from around INR 1,600 crores in September 2023 to INR 20,500 crores in September 2024. The total number of overall mature portfolios stood at around INR 21 crores with a year-on-year increase of 34%. The individual average AUM grew by 50% year-on-year from INR 28.1 lakh crores to INR 42.1 lakh crores and contributed 62% of the total AM. B-30 cities with an average AUM of INR 12.5 lakh crores account for 19% of the total AUM.

[indiscernible] our overall assets under management including alternate assets reached INR 4 lakh crores, reflecting 20% year-on-year growth. In fact, which is crossed INR 4 lakh crores first time ever in the history of the high development and mutual fund.

Our mutual fund quarterly average AUM reached INR 3.83 lakh crores, growing 23% year-on-year. The quarterly equity average AUM stood at INR 1.81 lakh crores, growing by 39% year-on-year. The SIP booked in the quarter crossed INR 1,400 crores as a 47% year-on-year increase from INR 968 crores in September 2023 to INR 1,425 crores in October 2024.

The other added around 1.5 lakh new SIPs, 5x increase compared to the previous year. I'm also happy to share that our total investors folio have crossed 1 crores, with around 19 lakh new folios being added during the last quarter.

On the investment side, during the quarter, we have witnessed an uptick in the performance of our equity funds, and number of funds are bidding the respective benchmarks and other fee averages in the respective categories there. It is in fact, there a positive perception among our distribution partners and investors is large, leading to an increase in overall Net Promoter Scores. We are expanding our fund management team, which will enhance our capability of managing core equity funds effectively further.

I'd also like to mention that the increased level of engagement at a ground level, supported by strong investment performance is helping us narrowing the dip in the equity market share on a quarter-on-quarter basis.

On the fixed income front, we continue to deliver robust returns across most categories and be the preferred choice of investors. We have taken some steps in offering products to meet the investors expectation by planning to launch a number of [indiscernible] as well as promote our duration bonds.

As interest rates start falling, duration bonds also, we believe will start picking up. As we have been highlighting about our commitment to building our alternate assets and passive business, we are making good progress on this segment of our business vertical. The alternate segment, PMS and AIF remains a key focus.

Our PMS and AIF assets grew by 66% from INR 2,300 crores to INR 3,900 crores in the current quarter. Our offshore assets also had witnessed some flows during the current quarter, which grew by about 31% from INR 9,700 crores to INR 12,700 crores.

Our GIFT City operation, the gateway for inward and outward remittances has also gathered momentum. We'll be closing soon our first emerging market products under Elara scheme by February wherein we already have elected a USD 50 million.

The ESG fund created for inward for remittance, we got a first collection of USD 25 million and more fundraising is currently underway. On a similar line, we also created the ABSL Flexicap fund for inward remittance for NRI investors. Further, we also taken approval from the GIFT City authorities to launch yet another product called the ABSL Global Blue Chip Fund under the LRS cans, ODI and OPI schemes.

During the quarter, we also launched the performing credit opportunity front under AIF. In order to build phase in this category, both from domestic and global investors. We also committed our own capital to support both of these fund out of your treasury portfolio.

On this passive front, as of 30 September, 2024, our assets totaled to approximately INR 31 crores. Our customer base has also grown over 9.5 lakh folios and we also have a diverse product portfolio of over 47 product. The other plan to launch new funds in the coming quarters to expand our passive offering for investors.

I'm also happy to share that during the quarter, we also won the ESC mandate under the advisory route and documentation under progress to get the actual funds into our account so that we can start managing the portfolio effectively very soon. The current quarter on the people front, we have made a few changes to further strengthen our leadership team to drive some of our core support functions for growing our business.

We've added a new Head of Digital and Data Analytics, a new Head of Marketing. And this strategic addition will drive innovation and enhance our customer engagement and service and helping us expand the customer wallet share as well as the mine share, ensuring that we had in a rapidly evolving market.

Moving on to the financial for the quarter. Our total revenue is about INR 520 crores versus INR 391 crores in the Q2 of FY '24, up 33% year-on-year. Our profit after tax is at INR 242 crores versus INR 178 crores in Q2 FY '24, up 36% year-on-year.

On the first half FY '25, our total revenue is about INR 1,001 crores, up by 28% year-over-year, and profit after tax was at INR 478 crores, up 32% year-on-year.

With this, I would like to conclude and open the floor for any questions that you may have. I'll be joined by Prakash to answer any of the questions that you may have related to the financials and other numbers that you may have. Thank you.

[Operator]

Our first question is from the line of Dipanjan Ghosh from Citi. .

[Dipanjan Ghosh, analyst]

So first, a few data-keeping questions. One is if you can give the overall employees for the quarter as in the period ending? Second is SIP flows for the quarter. And third is the revenue from the non-MF businesses since they have been doing quite well.

And apart from the data keeping question, I have 2 more questions, which is if I look at some of your peers, especially some of the leading ones, they have undergone certain changes or are undergoing certain changes in terms of the payout structure to the distributors, either on the back book or an incremental close in certain cases.

So I just wanted to understand, have you taken any such exercise or envision taking any such exercise in the near future? And my second question is on the non-MF businesses, what sort of incremental investments be it on the investment team, sales team or other teams that one should kind of factor in going ahead?

[A. Balasubramanian, executive]

Sure. Overall employees, including approval -- Prakash will answer this question in a while. In terms of SAPs, we have about INR 1,423 crores inflow per month. That's something we ended in the month of September.

With respect to the alternate assets revenue, how much is increase?

[Prakash Bhogale, executive]

So Dipanjan, I'll answer the data keeping questions which you have asked. So number of employees as of September is around 1,552, our SIP flow for the quarter is around 1,171, and the last question which you asked is alternate asset income for the quarter, it's in the range of around INR 44 crores.

[Dipanjan Ghosh, analyst]

Okay. So in fact, it was 1,070 or 117?

[Prakash Bhogale, executive]

4,171. You asked for quarter, know?

[Dipanjan Ghosh, analyst]

4,171. Okay.

[A. Balasubramanian, executive]

For the full quarter. Full quarter. Yes. The alternate asset revenue what is the incremental revenue?

[Prakash Bhogale, executive]

It's around INR 25 crores to INR 26 crores incremental revenue we have got in this quarter because our AUM has increased in the alternate space, mainly in the PMS and AIF segment. .

[A. Balasubramanian, executive]

Yes. Okay. With respect to the question that you asked about commission structure, which I think you're upper about competition. See, in our case, we have is to keep evaluating it on an ongoing basis wherever, we need to moderate keeping in mind the growth expectation that we have set. I think we have 2 tasks in our hands. One is growing the pie continuously, and there's on a high priority in terms of increasing our market share as well as increasing our overall equity assets and management.

And given also the fact that that we have been increasing -- we're working towards improving overall employee productivity by increasing the sales. Therefore, keeping this in mind, whenever we feel the appropriate time for us to revisit this, and looking at overall the corporate landscape, we will consider the suitable step at that point of time.

As it stands today, right now, we are not thought about anything or that kind of value chain. But anyway, there's ongoing exercise that we keep doing it, looking at the overall profitability contribution combined with the growth expertise that we have.

With respect to the non-mutual fund, the sales team, of course, with respect to the overall people management as far as investment concern, I've been highlighting for quite some time, the change that we have made. In fact, the last addition that we have done getting one person on board with real good experience in managing mid-and-small cap similar to the market. So he's coming on board by the middle of November.

With that, we'll have complete the addition of the investment concern. Given the fact that SEBI also has given the new idea of the new fund category have created using the derivatives will build some capability, getting some talent pull on that space if at all, we have to manage some assets in the same space, we'll ask I'm going to readymade talent pool available for that space.

The other areas where we'll further beef up on the alternate phase, of course, with respect to selling alternate business as a key sales people, we have roughly about some of our team across the country to coordinate their sales force. We will probably look at increasing that by whenever there's a need. At the same time, direct sales team we have roughly about 45 people currently. And we keep thinking about that number can actually go up a little higher. This year, we have, of course, accounted for about 50 people addition that we have talked about out of this, we currently have 45 people.

And if we think that segment, we'll have to further improve further. I will probably beef up the team depending upon which part of the year we must do it. And lastly, of course, to bring the overall alternate sales to next level, we also, of course, evaluating person who could help us in build the alternate business not just only in domestic market, in reaching out to the global investors even the fact that we are also looking at seeing some kind of momentum coming in our offshore business.

We'll probably look at a talent pool who can actually work both domestic investors, the institute investors and family offices as well as global investors, but something we are in the process of company, and hopefully should come on board by -- Jan, February timeline.

[Dipanjan Ghosh, analyst]

Got it, sir. Sir, just one follow-up. If I look at your SIP discontinuance rates, that seems to have kind of gone up meaningfully whereas your overall quarter-wise SIP flows has been broadly stable or marginally improving. How should one really reconcile this?

[A. Balasubramanian, executive]

Yes. I think the SIP cancellation generally, what happens is generally in the thumb rule for the industry is roughly about 40% to 50% kind of cancellation happened. Of course, also gets reregistered. The way I look at the registration number, I think if you look at our presentation, the SIP registration numbers from 233 is somewhere about 11, 13 number you see. That's one way to measure the fact. I keep looking at the new customer addition should actually help in improving the overall base.

The 19 lakh new customer folio that we've added is all actually with the intention to increase the overall gross pie. While we have a great opportunity to retain customers, they have redemption stopping, et cetera. We actually formed a small set of team given the fact that we have strengthened our analytical capability, wherein we can create a predictive model basis, which we can -- we told the customers before they canceling the SIPs, which records to win back. So we have put a separate team of people to drive the win-back initiatives as well as the people who are looking at market volatility, we're deeming unknowingly, therefore, how to actually reach those customers instantaneously so that before the money can get credit on account, we can highlight with the investors how important for them to stay invested for long term and how important country SIPs. Therefore, that's something we are driving into the -- service to sales are on mature that we have as well as the data analytic person who have come on board, he of course, came on board from one of our ABC unit only and who understand the the NPL customer behavior using the analytic. I think he is also of course going to help us in terms of improving the return ratio by way of win- strategy. So that's the way we are looking at it.

Of course broadly, the way I look at it is the top line number should keep improving, approvals to task. At the same time, returning of assets both to help simultaneously, we do it effectively, should help in improving the overall momentum.

[Prakash Bhogale, executive]

Only one clarification. The alternate, which I had told you INR 34 crores, which was increased by around -- which was INR 21 crores last quarter same year.

[Dipanjan Ghosh, analyst]

Yes. So INR 21 crores in 2Q '21, and this compares with -- or 1H, so you're telling 2Q or 1H?

[Prakash Bhogale, executive]

No, no. I'm telling last year same quarter is INR 21 crores. So in the current quarter, it's INR 34 crores.

[Dipanjan Ghosh, analyst]

Okay. Okay. So in 1Q, '25 will be around the same number as in the previous quarter?

[Prakash Bhogale, executive]

Yes, it is around INR 30 crores.

[Operator]

Our next question is from the line of Lalit Deo from Equirus Securities.

[Lalit Deo, analyst]

So just 2 questions. So if we just try to exclude the revenues from the non-MF business, then probably our...

[Operator]

Sorry to interrupt Mr. Lalit, if you can speak a bit louder?

[Lalit Deo, analyst]

Yes. Is this -- am I audible?

[Operator]

Yes, you are audible now.

[Lalit Deo, analyst]

So I just wanted to ask like if we exclude the revenues from the non-MF business, then our yield -- broadly, our yields have remained stable and at the same time, our share of equity AUM has slightly inched up. So just wanted to understand the segment-wise revenue wheels over there?

[A. Balasubramanian, executive]

Sure. I'll ask Prakash to answer this question.

[Parag Joglekar, executive]

So Lalit, as you rightly pointed out, because of the increase in our mix, our yield has remained stable compared to last quarter. So you can see in our presentation, our mix has increased from around 42% to 47%. This is one of the reasons for maintaining the margin, even though the size in the equity assets has increased. So on the asset class wise yield in the case of equity, it is around 67 basis points. On the debt, it is around 24 to 25 basis points on liquids around 12 to 13 basis points.

[Lalit Deo, analyst]

Sure. So second question was that on -- so like in the SIP flows, so while the industry has grown at a much faster pace and like we have grown on an absolute basis, but in terms of market share, we have lost a some market share over there. And at the same time, where we are seeing some improvement in the scheme performance. So what would be the reasons for us that is lower growth as compared to the industry growth in the SIP flows?

[A. Balasubramanian, executive]

Yes. I think if you divide the SIP flows into 2 parts. One is the online digital platform sales, it currently contributes about 50% to 55% of the sales come from the segment. The traditional channels other than direct contributes roughly about 35%. In fact, the traditional channel other than MFDs, there has been a bit of slowdown in terms of the SIP contribution, large contribution coming from the online channel customer additions.

As you know online channels comes in on the basis of the top 3 performance among the competition. In fact, we have seen some of our funds which are performing well, being part of the online channels wherein we have seen good momentum coming in, both in terms of SIP, the customer addition as well as the overall number of folios rising in that space, of course, they don't contribute to the significant in terms of value. Most of the value come from both the direct and as well as the traditional channel.

I think that is one of the reasons why you would have seen our absolute number has been rising, our folio number has been pricing, but the radar growth in terms of value compared to the end of Q3, marginally lower. But the way we look at it is the -- while that's the case so far, we also, of course, there is a separate target for each of the channels to measure the success of sales productivity as our focus on average ticket sales coming from the traditional channel, which is, I mean, of course, the key.

I mean the performance improvement that is being -- which I mentioned about and general perception is also moving quite significantly on the upside. It should also lead to another should get a sufficient backup in from the ticket size is also rising. Of course, in terms of count is one part of it. I think ticket also, which should come -- may have increased parts coming from the traditional channel.

[Lalit Deo, analyst]

Right, sir. So just 1 clarification, like when we say that 50% to 50% comes from the online channels, is it for us? Or is it for the overall industry are you talking over here?

[A. Balasubramanian, executive]

It is for the industry as well. Industry also is more or less similar numbers. I think for us also would be roughly about 45% to 50% will come from the online channels. Gain momentum in terms of giving new customer addition can definitely give you a momentum. But of course, they all go by the whole industry, there so many funds are that they'll collect only top 3, top 4 on a base of 1 year, 3 years, the performance. There were some will get, some will get a look at the industry wide if you look at numbers, there has been a significant growth is coming from non-top 10 players as well. And this is a function of these dynamics there.

[Lalit Deo, analyst]

Right. Right. And just 2 data keeping questions. One, could you give us the SIP AUM as of September '24. And just wanted to understand, like in this quarter, we have seen some increase in our other expenditures, other OpEx. So any reason -- any particular reason for that?

[Parag Joglekar, executive]

Yes, AUM is INR 83,900 crores as of September '24 and increase in the other OpEx is mainly on account of the software charges. The database research, there are some expenses on the CSR and there is some increase in traveling costs. So these are the main heads wherein the cost has increased.

[Operator]

[Operator Instructions] Our next question is from the line of Abhijeet Sakhare from Kotak Securities.

[Abhijeet Sakhare, analyst]

So my question is, again, coming back to flows, which funds are leading the revival inflows for us if you could name top 3, 4 funds, which are doing well last few months?

[A. Balasubramanian, executive]

Yes, sure. So when we are seeing increased traction in some of our key main funds, feel on the back of the one performance improvement as well as general acceptance of these funds have got over the long years of track record, which is the equity flexi cap fund, multi asset location fund, we are getting flows. Of course, we -- till last month, we used to get good flows from a thematic funds, especially in the PSU funds used to get the really good flows until last month even this went to have an infill, but there is a margin reduction given the fact that segment of the market has seen a bit of hit.

We're also seeing some flows coming on the -- coming on the balance advantage given the fact that's one segment where we are seeing increased the traction given the market volatility. And of course, our fund continues to see input also counted as an equity that continues to see inflows.

Among the thematic category, of course, the Quant fund, which we launched this recently, we continue to see some flows coming in. As well as we see flows coming in the thematic fund which launched about 3 months back -- for year back, which is the transportation logistics fund also seen flows.

[Abhijeet Sakhare, analyst]

Got it, sir. And again, from a channel point of view, only direct will be most responsive to start with. But are you already seeing a response from some of the traditional channels like MFDs or IFAs or that is still to come through?

[A. Balasubramanian, executive]

MFD improvement that I mentioned about the perception on performance improvement, which I mentioned about largely is coming from the distributors' voice across the country, wherever the team has been traveling, investor have been traveling at least there is an increased brand recognition. It's also leading to the actuation number, which I talked about, actuation number that we are talking about is also a reflection of participation coming from MFD that is additional channel as close to us, we have a lot of loyal distribution community, with whom we work with in multiple areas and improving their knowledge levels work closely with them, helping them improve in overall businesses. That's something we are seeing an uptick.

Banking channel, of course, one of the channel is traditionally large bank for us, so we go by 1 or 2 products as part of the accommodation. While some of the products are on hold, one good thing that I'm saying some of the product which are ready for the recommendation in some of these channels versus our product, we're already seeing some of our products are doing better than the part of the recommendations in these channels.

And hopefully, as we review and revise that, and as is starting our product getting incorporated with part somebody is going out should actually lead to increase in contribution coming from this large banking channel.

[Abhijeet Sakhare, analyst]

And sir, again, last one, a clarification on the banking channel. Is it true that, that channel actually puts much more weightage to the 3-year returns or or 1 year strong performance is good enough to drive flows there as well?

[A. Balasubramanian, executive]

See, we look at both, weightage for 1 year's improvement performance and also give for CPR ranking is done well, 20% weightage for the 1-year performance and balance is given for 3-year performance the same order they ran. But at the moment, you see a similar and same line, some of the fund recommendation has to move out then they bring in new funds that they traditionally attain them doing this. And of course, definitely, they recognize the improvement on the performance in the 1 year and 18 months period. It helps them to put on the top of the consolidation to get them on board faster.

[Operator]

[Operator Instructions] Our next question is from Mohit from Centrum India.

[Mohit Mangal, analyst]

My first question is that what are the NFOs that we are targeting over the next 2 to 3 quarters?

[A. Balasubramanian, executive]

We have taken approval from SEBI, 1 diversified equity fund, with the thematic nature. That's something we will plan to launch sometimes both this until current festive season. Second, on the back side, we also taken approval for launching 1 fund again on the thematic category with a reasonably -- close to about the price in economic. That is something we have taken approval.

And these 2 funds that we have as part of the pipeline. On the fixed income side, of course, we have planned launch of a few products, as I mentioned in my opening remarks, target maturity fund, series of funds that you have planned, there is again a draft some bit of market as well fixed income goes down.

On the GIFT City side, we have, of course, taken approval from -- we already have a product in place for no remittance, which is a flexi cap fund that will fit into my existing funds. That's something we have already set it up. We should see some of our momentum coming in that phase, though ammonium ticket size is still higher, is not meant for retail, it's actually more than $100,000, somebody can put in from overseas. That's something we have set it up.

We also have plan to launch one for outward remittance, which just mentioned about from India to overseas under the LRs, ODI and OPI. That's something also we have set it up and hopefully, that fund, we should launch in sometime in the month of Jan, February, upon closing the existing funds, which is coming from a closure in the month of February. But these are the plans that we have.

In addition to that, on the AIF side, we are in the process of fundraising on the credit opportunities front, private credit opportunities this time, which again I mentioned about in my remarks.

[Mohit Mangal, analyst]

Okay. Okay. That's great. And then basically, any idea as to how this NFO that -- the size of NFOs maybe a lot of more passive as well as on the fixed income and equity. Any indication on the size of that?

[A. Balasubramanian, executive]

Too early to give you the size, Mohit, given the fact that I think we have the play it as we start launching this fund. But definitely, our endeavor would be to create the high level of engagement that we have at the ground level, add to the overall outcome of these funds in terms of collections.

[Operator]

[Operator Instructions] Our next question is from the line of Bhavin Pande from Athena Investments. .

[Unknown Analyst]

Would it be possible to quantify in terms of the percentage of AUM or how the strategies are behaving and in bucket, how they are outperforming their...

[Operator]

Sorry to interrupt Mr. Bhavin, your voice is a bit muffled. If you can please repeat your question.

[Unknown Analyst]

Yes, sure. Am I clear now? .

[Operator]

Yes.

[Unknown Analyst]

Yes. It would be great if you could shed some light on how funds as a percentage of AUM are outperforming vis-à-vis the benchmarks and also in terms of bucket for 3 months, 6 months and 1 year?

[A. Balasubramanian, executive]

Sure. So I think Bhavin, the way we keep looking, of course, on a quarterly basis, and we keep reviewing it roughly about 60% to 65% of our funds today not only beating the benchmark, they're also being performing better than the peer average in the respective category. We look at peer average, both the funds that are comparable to us.

Second, we also have to look at the broader -- all funds are put together. And both the categories and peer average of performance it's roughly about 65% of our assets. The other good thing is the funds generally since we have many funds that we are managing it. funds, which, of course, sometimes for a variety of reasons, could be in the bottom of the quartile. In fact, we don't have any funds in the bottom of the quartile, which also change in the overall improvement that I'm saying.

The number which I'm saying is it is both on a 6-month and 1-year basis. In fact, even on a 3-year basis, a number of funds, which is outperforming the index is almost now coming close to about 45% to 50% on a 3-year basis also reflecting on the overall improvement. I think as I always believe that as we start improving in very short-term performance moving from 3 to 6, 6 to 9, 9 to 1, and 1 to 1.5 years, naturally, it actually pulls up the long-term performance as well. That's why we are seeing it happening.

[Unknown Analyst]

Okay. And sir, I think you shed some light a bit on the digital channel mix. But if you look at the participants across industry, everybody has seen robust flows contribution via digital channels. So when do you think our digital channels would start picking up and would start contributing meaningfully?

[A. Balasubramanian, executive]

See, we already started to see the momentum in the last 2 quarters. If you have listened to my areas some of my directories have given. The last 6 to 8 months that we have seen tired from the March quarter ending, and we have seen it in starting in June as well as the current quarter.

In terms of increase the participation coming from our digital channel, both in terms of the fully getting added as well as new customer addition. And as I mentioned, the current improvement of performance that we are seeing in the key categories, we would also, of course, take enough steps to ensure these products are being highlighted in this platform, and therefore, it comes as a part of the recommendation list. Therefore, we get some incremental AUM from this segment going forward in some of the product that we are confident of getting more money.

But we're already seeing that the engagement that we have had with the digital channel partners have been reflecting in terms of momentum. In fact, the last few quarters improved traction that we are seeing on the SIPs. It is a combination of digital channel as well as MFD channel.

[Unknown Analyst]

Okay. And sir, across channels, are we seeing that flow share hard than the stock share.

[A. Balasubramanian, executive]

What is that?

[Ravin Kurwa, analyst]

The flow share, is it higher than the stock share across channels? Flow market share, it is higher than the stock market share?

[A. Balasubramanian, executive]

Stock market, I didn't get your point.

[Unknown Analyst]

So sir, so let's say, we have acquired the market share in terms of AUM to the incremental flows. I'm talking about that.

[A. Balasubramanian, executive]

Flows market share -- no, at this point of time, I think from industry market share flows versus us, we're, of course, below the industry shares. Of course is improving numbers further, sharing the way I think industries are also growing so fast as line as we get our deserving market share. Not necessarily it has to be higher than the market as long as we are deserving market share, which is what our activity is there that sufficient activity to bring in incremental further growth. .

[Operator]

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

[A. Balasubramanian, executive]

Yes. Thank you, everyone, for joining. And with this, we conclude our Q2 FY '25 earning call, I'll also take the opportunity to wishing all a very happy and prosperous Diwali and do feel free to reach out to our IR Head, Prakash Bhogale for any cores that you may have. Thank you. .

[Operator]

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