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‘The Indian macroeconomic situation is strong thanks to the various reforms initiated by the government,’ says ICICI Prudential AMC MD & CEO Nimesh Shah.
ICICI Prudential AMC MD & CEO Nimesh Shah.
ICICI Prudential AMC, which is the second-largest mutual fund house in India in terms of assets under management, is witnessing its initial public offering to raise about Rs 10,600 crore. Today is the last day of bidding. In an interview with news18.com, ICICI Prudential AMC MD & CEO Nimesh Shah discussed the IPO, the mutual fund industry, and India’s economic growth situation. Edited excerpts:
The IPO is entirely an offer for sale. How should retail investors interpret this?
This IPO does not change the way the company operates. Prudential Corporation Holdings has invested in the business for nearly three decades and is undertaking a partial monetisation. ICICI Bank continues to hold its stake and shall remain a majority stakeholder. Hence, the business continues with the same management, investment philosophy and governance framework. The IPO provides liquidity and wider ownership; not a change in our company strategy.
The mutual fund industry has grown rapidly over the last few years. What has driven this growth?
The growth has been driven by two high-quality factors. First, systematic transactions has expanded meaningfully, bringing long-term, stable money into markets. Second, market appreciation naturally increases asset values. This combination has resulted in healthy, sustainable growth.
How sticky are SIP investors, especially during market volatility?
When SIPs are goal-based, such as retirement or children’s education, investors tend to remain invested through cycles. Short-term volatility may impact a small portion of tactical or performance-chasing investments, but the core SIP base is stable. Over time, disciplined investing creates a better investor experience, which strengthens stickiness.
How sustainable are the profits of ICICI Prudential AMC amid regulatory changes?
Regulation has consistently strengthened the industry by aligning costs with investor interest. Telescopic pricing and expense rationalisation improve affordability for investors, while higher volumes compensate for lower margins. This is a scale-driven business; lower fees and higher participation ultimately lead to higher absolute profits over time.
With the rise of passive funds and ETFs, is active management at risk?
As long as active strategies deliver alpha, investors will allocate to them. In India, the majority of flows still favour active funds because performance has largely justified it. The real risk for any AMC is not competition or regulation; it is underperformance.
Your equity and hybrid funds have significant scale. Does asset size affect performance?
Scale does not dilute discipline if processes are strong. Our investment teams operate across styles — growth, value, contra, and quality with robust risk management frameworks. The focus remains on beating benchmarks over time periods. Performance and risk management, not asset size, remains the only true long-term differentiator.
You often highlight operating profit rather than PAT. Why is that important?
PAT can be influenced by balance-sheet investments. Operating profit reflects the true earnings from managing money. It is a cleaner measure of core business strength. By this metric, we account for about 20% of the industry’s operating profit pool, which reflects both scale and efficiency.
How does listing change accountability to investors and unitholders?
Listing does not alter our fiduciary responsibility. Shareholder interests are aligned with unitholder outcomes because our revenues grow only when investors stay invested and their wealth compounds. We view ourselves first as a risk-management company that manages money. That culture does not change after listing.
What gives you confidence in the long-term India equity story?
India has delivered multi-decade nominal GDP growth near double digits, supported by structural drivers such as demographics, formalisation, digitisation and rising household savings into financial assets, to name a few. The Indian macroeconomic situation is strong thanks to the various reforms initiated by the government. With this foundation in place, the economic activity is expected to gradually accelerate. This is reflected in equity markets in the form of earnings growth. All these put together give us the confidence that long-term investors who stay disciplined will be rewarded.
Click here to add News18 as your preferred news source on Google. December 16, 2025, 11:07 IST
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