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Listed Indian life insurance companies, though few in number, were viewed as quasi-AMCs until now thanks to their popular product — unit-linked insurance policies, or ULIPs, which are largely an equity market-based instrument.
More importantly, unlike the West, where the AMC business is a fully mature business model, in India, the penetration of mutual funds is still catching up and is abysmally low. With a mere five per cent penetration of AMCs in financial savings, the needle is expected to move up as demand for physical assets (such as gold and real estate) lose sheen in the coming years. The theme of increasing financialisation of savings is expected to propel the industry. As all this augurs well, investors have long-term expectations from RNLAM's IPO.