Ladies and gentlemen, good day, and welcome to Aditya Birla Sun Life Asset Management Q1 FY25 Earnings Call hosted by InCred Equities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. 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.
Yeah, hi, and good evening, everyone. On behalf of InCred Equities, I welcome all to Aditya Birla Sun Life AMC Q1 FY25 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 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.
Yeah. 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 first, before I give an update on our quarter-one 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 recessions appears to have decreased, and the global economy has shown resilience to higher interest rates as well. The macroeconomic outlook for India remains broadly positive. The Indian economy grew by about 8.2% in FY2024, higher than expectations.
The RBI is projecting the real GDP growth for FY25 to anywhere between 7.2%-7.5%. The key contributors to the economic growth include significant government spending on infrastructure and driving manufacturing sectors and a strong domestic demand, as we know to all of us.
To reflect specifically on the Union Budget, announced earlier this week, we feel it is in line with the vision of building a self-reliant market, focusing on the critical drivers such as emerging sectors, agriculture, manufacturing, and a strong impact 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 market opportunity, and not deflect from the fiscal glide path as well. The budget did not have any specific announcement for the mutual fund industry, except marginal tinkering that has been done in the capital gains tax.
The increase in capital gains taxes may not happen, my belief, based on market sentiment, but also have a significant negative impact on the market and mutual fund industry. The reason is that the financial wealth that has been created in the country over the recent years makes the additional tax burden relatively minor for most investors. Moreover, investors typically base their decisions on potential returns and economic growth rather than solely on tax considerations.
In the equity market, as compared to underperformed global counterparts, reflecting the strong fundamentals of the Indian economy and the earning potential of the companies across sectors, we see some earnings consolidations going ahead. With the country's strong structural drivers and economic fundamentals remaining intact, there will be continued participation in Indian equities.
Given India's fiscal health, one can expect raising upgrades for the country, which would also be an 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 1,396,000 crore as compared to INR 48 crore last year around the same time, growing 37% on a year-on-year basis.
During the quarter, the mutual fund industry witnessed equity net sales around INR 100,047 crore through new funds offering and existing funds. In fact, in NFO collection, the equity fund was about INR 23,200 crore, majorly coming from sector and thematic funds. The industry SIP flows grew 41% year-on-year from INR 14,734 crore in June 2023 to INR 21,262 crore in June 2024. The total number of mutual funds folios stood at 19 crore, with an increase of 28% year-on-year, with a unique customer base of around 4.7 crore.
The individual average AUM grew by 46% year-on-year. From INR 2,867,000 crore to INR 3,747,000 crore, and contributed 61% of the total AUM. These 30 cities with an average AUM of INR 1,113,000 crore account for 18% of the total AUM. For us, the Aditya Birla Sun Life Mutual Fund FY25 has been a special meaning as its milestone for our company, as it celebrates 30 years as an asset management company and a key player of the Indian mutual fund industry.
Anchored by our unwavering values, rich legacy, and exceptional team, we have built on a strong foundation. And endeavored to be a formidable force in the industry. We have navigated market dynamics with agility and innovation, focused on our core strengths, 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 have further gained pace as we move to the current quarter. This is reflected in the strong momentum in our AUM numbers and growth in SIP numbers, and healthy retail growth.
We posted the highest-ever quarterly profits and have witnessed a substantial increase in investors' folios across various channels during the current quarter. We had a successful NFO collection of Aditya Birla Sun Life Quant Fund, mobilizing assets around INR 2.4 crore. 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 T30 cities.
We have not just seen an increased growth contributions of corporates through institutional sales, but also a rising trend in contribution through digital platforms and distributors in general. Our business verticals in the alternative segment. H ave also showcased 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 the result of building a robust sales ecosystem, enhanced management at the relationship manager level, increased satisfaction with service effectiveness, and a positive sentiment towards the fund performance, and improved digital experience have all contributed to positive sentiment and overall improvement of the overall AUM numbers.
Moving on to our business numbers, overall average assets under management, including alternative assets, reached INR 362,000 crore, reflecting 19% year-on-year growth. Our mutual fund quarterly average AUM reached INR 347,000 crore , with an equity quarterly average AUM of about INR 167,000 crore.
We have witnessed healthy growth in our investors' folios, have added around 9 lakh new folios during the quarter, bringing our total service folios to 94 lakhs. Our quarterly folio growth of 9% compared to the industry 7% growth. The alternative segment, PMS and AIF, remains our key focus area, which are part of our alternative business building exercise.
We have strengthened our team and appointed a head of fixed income credit. A nd aim to offer a variety of products, including category two or category three alternative investment funds, and fundraising and rebate for the ABSL India Special Opportunities Fund, which has been one of the growing funds in the AMC 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 NRE fund investors. We are using GIFT City to launch a variety of innovative financial products, including a product which is ESG Engagement Fund for Sustainability, Index Linked Fund , and Thematic Fund t hese products are designed to meet the evolving preferences of global investors and target a niche market.
We have launched and currently fund under a fundraising plan for funds for the ABSL Global Emerging Market Fund that invest in emerging markets. We already touched the size of close about INR 400 crore. We will be soon closing this fund in the next few months. ABSL Index Linked Fund that we are launching for inward investments in India. At the same time, we also are launching a fund which is India Opportunity Fund for foreign opportunities, NRE investors invest in India.
We are also preparing launch funds in GIFT City, including ABSL India ESG Engagement Fund. We had highlighted in the past that ESG Engagement, but finally, we are seeing the seed capital coming in, and this fund will take off in the next quarter in order to raise funds from the rest of the investors in India.
The same way, the Flexi Cap Fund Global Blue Chip Fund, a fund opportunity being created to attract NRE investors into India through the GIFT City. On the Passive fund as of June 2024, our Passive assets total to approximately about INR 2,900 crore. Our customer base has grown to about 1.5 million folios , have a diverse product portfolio of about 44 products. Their AMC and AMC are focused on driving growth in the Passive segment.
They have enhanced our Passive core team by bringing in a head of Passive with international experience, having worked with some of these funds in the U.S., which focus only on Passive. And we are also looking at further expanding our product offering to capture, the opportunities in the thematic segment, both through the Passive route as well as the mutual fund route.
Moving on to financials, we are at ABSL AMC. We are happy to inform you that we have achieved our highest-ever quarterly profit in Q1 of FY2025. This has been driven by an improvement in the asset mix, overall asset mix, and a strong focus on cost management. Our total revenue is about INR 418 crore versus INR 318 crore given of FY2024, up 24% year-on-year.
Our profit after tax is at INR 232 crore versus INR 185 crore in Q1 FY2024, up 26% year-on-year. In fact, it was also driven by improvement in the overall operating profit that we have witnessed through the current quarter, which is due to the mix of assets changing. With this, I would like to conclude and open the floor for any questions that we 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.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask a question, please press star and one now. The first question is from the line of Lalit Deo from Equirus Securities. Please go ahead, sir.
Yeah, hi, Sharpreet. And congratulations on the good set of numbers. So, my first question is on the SIP flows, so, we have seen a good ramp-up in our SIP group and as well as in registrations. So, could you highlight the channels from where we are receiving the increased interest with the same? Also wanted to understand that this SIP flows also include the systematic transactions. So, could you just give us the breakup between the SIP and STP flows also?
Yeah. Thanks, Lalit. With respect to the SIP flows, largely we are seeing the flows coming from one MFD channel, which is our traditional channel, then the digital channel, then come from the rest of the channels, including direct. We have seen contribution coming from all the three i think the majority of the contribution has been coming from MFDs and digital channels.
With respect to the breakup, though, I don't have the breakup, but I think predominantly large proportion of the flows for us in the form of an SIP, less number of other coming from SIP t hat's again, we see that one of the opportunities, for us to push aggressively in terms of improving the overall number further to the higher level. But large contribution coming from the SIP route.
Yes, sir. And so how has been the trend apart from the SIP, how has been our trend in the lump sum flows also in the SIP side?
Lump sum flows, of course, we got a reasonably good lump sum flows in our NFO that we did. Predominantly, there's a route of about roughly about INR 20 crore in the form of SIPs, and the rest of the flows came through the lump sums. The existing funds, the roughly funds that we are seeing flows purely on the base of the acceptance, both in the large cap category, as well as the thematic category. There's the lump sum flows have been improving, but predominantly large flows have been coming through the SIPs.
Yes, sir. And so on the question, on the OpEx side, so besides the NFO, besides launching the NFO in this quarter, are other OpEx has been remained totally stable or has remained totally flat on a QOQ basis? So for the next two years, how are we looking at the expenses side? And can you also give us the guidance on the ESOP expenses for FY25 and FY26?
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 employee will be in the range of around 10%-12%, and 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.
And so on the OpEx?
As I mentioned, Lalit, as far as the OpEx concerns, one we, of course, continue to do brand expansion. We'll keep that as one of the drivers, especially in the emerging market where we're expanding further. Second, with respect to the people, whatever I've been communicating, most of the recruitment related at the senior level, they are more or less done a nd we now still further strengthen the team on a few areas.
Especially in the direct, and as well as on the alternate business. These two areas will further be filled a nd even in offshore, since we are seeing some kind of momentum coming back, especially towards India, as well as even we are also seeing some kind of resurgence as well in the offshore business concern.
Therefore, these are three areas where we may have to fill. People-related expenses we'll have to take. Broadly, this is an approach that we'll take a s Parag mentioned, we'll keep a close watch in terms of improving the productivity t herefore, increased productivity, will keep the OPEX under control.
Sure, sir. Thank you, sir.
Thank you so much. Participants who wish to ask questions, may please press star one at this time. The next question is from the line of Dipanjan Ghosh from Citi. Please go ahead, sir.
Hi, good evening, sir. 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 fund i mean, you have a large chunk of sectoral 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 except sectoral funds?
Second, you mentioned that your growth in other OpEx and per cost employee will be around that 10%-12% ballpark number. So, is this for FY 2025? or do you expect this to kind of remain a steady state guidance going ahead also? And lastly, three bookkeeping questions i f you can give your ESOP expense for the quarter? employee for the quarter? Yeah, so that was the last question.
Yeah. With respect to your first question, in terms of flows, largely, of course, net sales between the thematic fund, which is mentioned above, that's something that PSU Equity Fund, as well as on the Quant Fund that we have raised. As far as the diversified equity fund concerns, predominantly, the flows are more into 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 into the thematic funds as we stand today. But overall, though, of course, net sales number 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 money that has come into the industry, especially in the current quarter, which is mentioned about INR 100,000 crore.
Also, the differential product performing differently, depending upon where you have a large presence. Given the fact that a certain segment of the market has been giving a significant outperformance, in that segment, we as a fund house do not have a dominant presence. To the extent that we have seen the market share improvement is not coming as much as we would have desired to be.
But however, there is step that is being taken, such as the successful closure of one NFO, successful push in terms of SIPs with a clear target to take higher numbers. And there's one area where I'm seeing improvement in terms of addition, is the new customer additions in the industry.
Now, our share has been improving. And the same way on the SIP new addition as well, c ompared to the industry, I'm seeing an uptick, as well as increase in the gross volume as a percentage, which is a reflection of productivity. All these things, my belief is, would eventually lead to improvement in the market share n ot necessarily will have a significant significantly it can move unless we see very large flows coming in a few other NFOs o f course, we do gun for it.
But, given the operating model that we have, I think these are some of the steps that we are taking in, should help in terms of moving up in the overall attrition, overall contribution to the growth. With respect to the OpEx, we ask Parag to give a sense and ESOP.
So depending on the ESOP cost, it is in the range of around three or so, which is already part of the employee benefit cost. And what was the other question? The OPEX, the guidance is more or less 10%-12% t hat 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 the grant expansion in that way. But we will try to keep a close watch on the overall expenses, to ensure that it is under control.
My question is-
Number of employees as of June is 1,520.
Okay. So now, my question just a follow-up question is, this guidance of cost, is it for FY25 or in terms of, let's say, when the market kind of stabilizes a bit in FY26 or FY27, 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 equities for fresh versus backbook and how the payouts are shaping up.
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 a nd depending on the growth of the overall AUM and overall business, that can be tweaked to a certain extent. But, majority will be on the fixed side of the expenses. On yield, equity is in the range of around 68 basis.
On the new, I think.
New, generally, depending on scheme to scheme, but we generally share around 65%-65% of our TER with the distributor. So, yield on the new will be lower than the overall yield on the stock.
Got it. Got it. Got it. Thank you and all the best.
Yeah. Thank you.
Thank you very much. Participants who wish to ask questions, may please press star and one at this time. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Divesh Aggarwal, IIFL Securities. Please go ahead, sir.
Good afternoon, sir. Thank you for the opportunity. My first question is, sir, these tax changes that have been made in the budget, how do you think? this would impact the inflows into the mutual funds for different categories. Do you see? that post-March 25, the AUM that is there on the debt schemes, can that see a turn to other schemes?
Yeah. I think the way we see tax changes, as far as equity is concerned, no negative impact. The increase in the capital gains tax should not have much impact, as far as the flows concerned, because the large flows have been coming, keeping in mind the longer-term investment needs of people.
Therefore, again, being pushed to the SIPs, for all, we're coming to the gold-based investing t herefore, I don't see, as far as the equity is concerned, unless we see the equity markets turn volatile, therefore, it has slowed down b ut nothing related to the budget, I would say. As far as the fixed income concerns, it's status quo n othing major as what we have been expecting.
Some steps will be taken to promote fixed income schemes in order to develop one market on one side, as well as create alternate product for significant equity further as coming as a question. But I have not seen, but it does not have any negative impact per se. At the same time, there are certain asset classes which are now coming into the long-term capital gains, such as REITs and InvITs i t now attracts the equity taxation.
I think these are some of the products that potentially could emerge m ay not be necessarily immediately, but can potentially emerge, including hybrid products could potentially emerge to get the retail investors as part of onboarding exercise. That's something internally we see could be an opportunity. As far as fixed income concerns, as the expectation of interest rates start setting in, which I think we will probably see that coming in, therefore, and equity market volatility if it's set in, then we'll see fixed income flows also towards the beginning.
But at the same time, what we are doing is, within the fixed income phase, well, of course, in the mutual funds phase, we continue to keep our dominant position. We're also building our product offering, on the alternative side with the fixed income-oriented schemes with higher yield return expectations than your traditional investment expectations, in the alternative phase by way of credit opportunities fund, as well as real estate yield fund, t hese are the two that we are doing it, mainly to the category of the HNIs and family office needs. Right.
On the same thought, sir, the recent consideration paper that study has noted in terms of a new category of investment, which is INR 10 lakh and above, what are our thoughts around that?
It's something new. There's a segment of people who otherwise play in the market directly using the options market, the fund 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 SAP has been thinking about such kind of product with any merit to be part of the mutual fund. Assuming scenario, this comes and, of course, will outbuild capability in terms of using the derivative market to have this kind of product and also help in the retail investors.
There is something, there is a phase, that needs to get educated the way we have done for other products for one to get higher participation. But as it comes, as the fund knows, the way we have been building capability in various other product segments, we'll do a similar one as well b ut right now, too early to take a call in terms of what is the real impact that one can visualize on this d efinitely, this kind of product will become one of the customer-attributing tools so that eventually, they become part and parcel of the main mutual fund schemes.
Right. Even I also understand similar lines. So, for this scheme, if at all this comes to mutual funds, would you need to have a completely different distribution channel which can kind of host such high, what do you say, per client area?
Not necessarily, I think. I think ultimately, one of the areas, I think MF industry has beautifully adapted and articulated this asset allocation model. It's like the way we are now seeing thematic funds also now drawing attention of investors as part of asset allocation. I think it'll fall in the same approach, so to speak.
Right. And sir, can you also share the yields on your debt and liquid funds?
Sure. Debt is in the range of around 25.20-25.26. And liquid is in the range of around 12.30 basis.
Perfect. Thank you so much.
Thank you. Participants who wish to ask questions, may please press star one at this time. The next question is from the line of Kunal from Carnelian Asset Management. Please go ahead, sir.
Hi, thank you for the opportunity. I had questions on asking returns, right? So basically, we're seeing improvement in one-year returns across our main equity schemes. Right? If you could elaborate, if you wish to a little bit more on the changes you have done to the investment team side, how do we look at? and in our interactions with distributors now since one-year scheme performance has improved, how do you see the traction? And so building upon that would be really helpful.
Sure. Thanks, Kunal. The way we have one, I think if you look at the investment side, one is the new addition 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 the funds have been in the Q1, Q2 performance across various categories.
And, second is the way I look at the visibility competition, how we are also in the peer group, how we are also performing in relation to the basis a s you rightly pointed out, the performance improvement was not just coming in one year now it's even coming in the longer term. That is something that has been being one of the mandates the investment team is working on it.
Second is the Quant Fund NFOs also, when we did a complete roadshow across the country, did have a positive impact, one in communicating what we have done, and what is being done in the investment team, both from a team processes and what are the steps that are being taken by the investment team to deliver consistent investment performance. That is being well appreciated.
Second is, in terms of communication on the same thing, is also being done effectively by identifying four or five products which can definitely get scaled up for us, given the fact they have a longer-term track record in terms of performance existence, long-term track record. People have made reasonably good money in each of those schemes. How do we get that communication done effectively to increase the level of engagement?
And the last, of course, is the retail focus that steps of retail focus that have brought in in terms of increasing the productivity of RM in every location. That's also being monitored very closely t he SIP improvement that I'm seeing, new customer acquisition that I'm seeing improvement, all in an outcome of the increased efforts that are being put by the team on the retail side. I think the process has begun.
With respect to investment, wherever the gaps are there in terms of individually having capability to manage a certain segment of the market cap, that also we have identified and will probably have somebody on board on the middle and small cap category where we felt probably we have to further strengthen our team t hat also we have taken steps to get somebody on board. Those are some of the things that are also being appreciated internally, as well as by the sales team, so that they can embrace the changes and have a little bit of better engagement in the marketplace.
That's something I see as a again, second, we also had our all-hands employee meeting being at the 50th year, just to re-energize the team, communicate very clearly in terms of what we are doing and how we are planning to do, and so that entire team members embrace the change that we are bringing in in order to go to the next level of growth. But also, of course, being appreciated by the entire employee force.
That's something we had to do, had to ensure that the strength of the Aditya Birla alliance is built over a period of time is understood by people. At the same time, the plan that we have to go to the size is also being, on top of the people across the board so that we get the contribution coming from every employee from every location.
Got it. That's really helpful. Also, if I understand correctly, you have made a few changes in the sales team as well, 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'd want to share the new hires, what's the focus, engagement, any changes out there also would help. And one more question to this. I'm not too sure how meaningful it will be in the overall 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 in the overall scheme of things. Thank you.
What's the first question, Kunal, with respect to the AIF you are saying, is it?
No, in respect of the sales team, right, also there have been a few hirings that have been made.
I got it. I got it. Yeah. I got it. Got it. Now, with respect to the sales, of course, we did some rejuggling in terms of more people movement. That's something we did with the external person coming in with the experience on managing on the wealth side as well as direct customers connect. That's something is done. And of course, incremental changes more would be at the support function. We have created really good strength in terms of our digital platform and the product and business development side, w e have identified a few areas of opportunities to further strengthen.
One such opportunity we have been driving is energy market opportunities. When we set it up about three years back, we have seen a significant contribution coming from the deeper parts of the location. We had a specific focus, t he team was driving it, with 100% energy going only towards building that business.
That's something we have reset it up as we have seen success. Taking on the direct sales, while we have about 35-member team, we of course have been thinking that an exclusive sharper focus that we can bring by having people who would drive it with 100% vigor in order to reach the team. Third is within the institutional business, we've been extremely successful in building our institutional business to have a higher market share.
On the institutional business team, also we are highly capable to reaching out to the family offices as well as ultra HNIs. That's something, again, we have set it up as a separate target that we should take in order to further expand the relation that we have in the institutional business t herefore, we'll be able to leverage that benefit t hat's something we are playing on three other changes that we are looking at.
Definitely, it's working quite well, in terms of having a sharper focus on execution, a nd last but not the least, the NRI segment, while having created space in the GIFT City, as well as creating presence in Dubai and other UAE platforms we created, we also feel that we can bring in a little more sharper execution focus on NRI customer acquisition.
Though it'll be too early from an output expectation point of view, but definitely create an expertise in that area could also help in getting NRI customers as we start setting up a fund of funds in GIFT City. That's something we do work in terms of expanding our business. With respect to the other question, second question was on the second question was on the selling
Within the ABG group.
Cross-sell after the ABG. Yeah. On the cross-sell after, one, of course, since the time there are two opportunities o ne is, of course, PIFA. The second is ABCD. We have a separate team of people, not a separate team of people, but the existing team to have 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 two things, O ne, 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 point of view, we have seen some attraction in terms of conversion of that into AMC customers.
At the same time, in the ABCD, which is the one digital platform, SuperApp that has been created by ABC, also we are seeing some of our product positioning that we have. In fact, we have seen a reasonably good traction coming on our Quant Fund NFO that we did. And a similar promotion is also being done on some of our existing products.
So, as the traction is increasing on the ABCD app, we are seeing actually increased participation coming in that. So, I can only say that in terms of the numbers, on a month-on-month basis, when we review each month, we are seeing an improvement, which itself is a sign of that we can contribute in addition to the push that we are giving at the AMC level.
Got it. Got it. Got it. Got it. Got it. Got it, sir. Cool. I mean, wishing you all the best. And also, congratulations for your reappointment, sir. Thank you.
Thanks, Kunal. Thank you.
Thank you so much, sir. The next question is from the line of Abhijeet from Kotak Securities. Please go ahead.
Hi, good evening, everyone s o, my first question, actually, I wanted to clarify on the equity yield. I missed that number, actually w as it 68 basis points or 60 basis points?
68 basis points.
68. Okay. Got that. And then, just on this point, again, generally, how do you see? the distribution commissions evolving, given that a lot of players 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?
What you are thinking of is we have to identify in front of us. One, of course, build a scale for that. And second is improve the overall customer acquisition strategy with respect to the equity. So therefore, for us, we can't go to the other extreme, one paying too much, given the fact we also have a responsibility to deliver reasonably good profits.
At the same time, we also cannot go down, take a call, compare the rationalization, and focus on improving the profitability i think we'll take that middle path at this point of time. And that's an approach that we have been taking as a fund house, given the fact that we need to, one, work with the distribution partners very closely to ensure business grows.
And, second, we also build our direct channel, and other channel partners, including RIA channel partners, where potentially the money could come where the cost of acquisition could be relatively low. But, at the same time, keeping in mind the overall aspiration that we have, so we will probably take that middle path. And wherever, of course, we have to give specific drives which may need some funding we have to 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 t hat call also, we have been taking. In fact, you would have seen this quarter, we did give an advertisement to some of our funds. But we did feel that while we are saying a lot of things right with respect to improving the overall AMC growth, we need to spend some money on the brand building that also we are undertaking as one of the exercises. Therefore, that's an approach we take, Abhijeet.
Thanks a lot, sir. And a question on flows. 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 five, six mainstream categories?
Yes. Definitely, we are seeing improvement, Abhijeet. Of course, we still have to do a lot more i m satisfied with the flows, not so much. But improvement is coming, definitely, no doubt. But we need to get see, one definitely is changing a trend in terms of customer acquisition, grosses improvement, metrics improvement on these schemes.
At least something is being like SIP number improvement. All these things, they will keep on improving. And therefore, it leads to a higher net sales on a quarter-on-quarter basis that will improve. But definitely, the trend is actually changing, which is what we keep driving the team from a larger creation of success point of view.
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?
See, Digital India Fund has been a driver for us as well. PSU Equity Fund, we are seeing good flows w e have seen good traction on that Banking and Financial Services Fund has been extremely well. Even GenNext Fund, where we've been officially going and telling that consumption theme could be the one area. We are even seeing some flows on the manufacturing fund, though the flow is not as big as what we see in the NFO segment? But we are seeing some flows in that.
Got it. And sorry, one last thing. Any other fund launches in the country?
We already have two approvals, One approval 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 a few pipeline of products for immediate launches. At the same time, we also have some products which we have taken approval from the board, which will be filed with SEBI very soon. And together, we are able to have one or two at least products additional to help us raise funds, while, of course, pushing the existing product on the other side.
So, that's the current pipeline o f course, we also have a product pipeline, for our GIFT City. Both for outward remittance as well as inward remittance. For outward remittance, we already started one fund. The one which already started is coming to a closure by September end, where we are in about INR 400 crore from the LRS side. That fund will give me about 40-50 basis points on additional revenue.
And, once it stops, we have actually one more product. We're generally launching it with the Global Blue Chip Fund. That's something which we have already taken approval from IFC. That's something we are launching it for both LRS as well as for ODI investment that can happen to the whole investment. And the one fund of funds that we are creating for Indian flows, that's something, again, we are pushing it in addition to what we are seeing on the domestic side. All the products are meant for both HNIs and retail. Therefore, it could have an above-perfect NIS side .
Got it, sir. Thanks a lot. Another question.
Thank you. The next question is from the line of Dipanjan Ghosh, Citi. Please go ahead, sir.
Hi, hi. Sorry, just one more question from my side. If you can give the SIP flows for the quarter?
INR 1,367.
[crosstalk] That is for the month. Month. For the month, it's INR 1,367.
Would you like the data for the quarter by any chance?
[crosstalk] Yeah, yeah. Sure. Thank you.
It's around INR 3,700, Dipanjan. Hello?
Yeah, hi. Yeah, yeah, sure. Got it.
It's INR 3,700.
So sir, just on that, if I do the 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. Normally, what we're seeing, and again, for January and February, your SIP flow market share was around 5.7. Just towards the last month of the period, it seems that the SIP market share is kind of jumping in the last two quarters t hat's the trend we've seen. How should one really read into this?
The way we see is, one, clearly, the SIPs, we look at it from two angles. One, the registration of SIPs for customer base which is coming, where the average ticket size would be roughly about INR 3,000, INR 3,200 kind of thing. And where we are seeing continuous improvement. And secondly, within that, new customer acquisitions, which I mentioned about online platform, where new customer acquisitions also come through that MFD platform, new customer acquisitions.
That is something we see as one. I mean, these two components is the one which clearly is the focus in terms of building it up. I think clearly, within the SIP, on an incremental registration basis, compared to the competition, especially new customer acquisitions, now the share comes to close about 8%-9%, that kind of number we are seeing. I think we have to look at from a combination point of view. I think one or two quarters, such improvement ultimately will make it more sustainable from an overall momentum perspective.
And sir, just on Abhijeet's question, you mentioned that your trend in thematic funds has been on an improving trajectory. But the gross sales number for the industry has also jumped multi-fold 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 well, so 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?
Yeah, yeah. Relative definitely shows an improvement. Only that with the thematic, you must also keep in mind, all the NFOs that come into the market are thematic. And we have fund houses having created a presence for the last number of years, 30 years, old players have got plus and minus as well. And we have a presence in thematic. We do get a rub-off effect on thematic funds as thematic funds come into 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 is good, but lower than the percentage of industry growth is 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.
Got it. Got it. Thank you and all the best.
Yeah.
Thank you so much. Ladies and gentlemen, this will be the last question. The next question is from the line of Lalit Deo from Equirus Securities. Please go ahead.
Yes, sir. So just one data keeping question. Could you also give the SIP AUM as of June end?
Yeah. It is INR 77,000, Lalit.
INR 77,000 gross.
INR 77,000 gross,
yeah. Yeah.
Thanks, Lalit.
Yeah. Thank you, sir.
Thank you very much. Ladies and gentlemen, I would now like to hand the conference over to the management for closing comments.
Thank you, everyone, for joining. And with this, we conclude our Q1 FY25 planning call. Do feel free to reach out to HR, sorry, IR head, Mr. Prakash Bhogale, for any queries that you may have. Thank you.
Thank you, sir. On behalf of InCred Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your line.