ICICI Securities PD, RCAMC, HSBC emerge top bidders for EPFO funds

Central Board of Trustees will take a final call on appointing fund managers for three years term beginning April 1 in its meeting on February 19

Asset management firms ICICI Securities Primary Dealership (ICICI Sec PD), Reliance Capital AMC (RCap AMC) and HSBC AMC have emerged as top bidders for managing the huge corpus of retirement fund body Employees’ Provident Fund Organisation(EPFO).

EPFO’s apex decision-making body, the Central Board of Trustees (CBT), will take a final call on appointing fund managers for three-year terms, beginning April 1, in a meeting on Tuesday.

As many as six asset management companies have qualified on the technical and financial bids for managing EPFO funds.

State bank of India had also submitted its bid, but CBT has already nominated it as fund manager for another term and will approve its appointment in the meeting on Thursday.

According to the agenda listed for the CBT meet, ICICI Sec PD has been ranked as top bidder on the basis of technical and financial parameters followed by RCap AMC and HSBC AMC.

At present, EPFO is managing a corpus of Re 6.5 lakh crore. EPFO's funds at present are being managed by SBI, HSBC AMC, RCap AMC and ICICI Sec PD. The term of these fund managers ends on March 31.

EPFO has a subscriber base of more than 50 million and receives Re 70,000 crore as incremental deposits every year.

During the current financial year, EPFO's incremental deposits are estimated to be Re 79,000 crore.

The tender for appointment of fund managers was floated on December 9. The EPFO received eight bids, including that of SBI.

The Axis AMC did not meet the technical parameters.

On financial bids, ICICI Sec PD’s was the lowest at 0.0000000005 per cent of the funds to be managed.

That means ICICI Sec PD will charge Re 5 for managing every Re 1,000 crore of funds.

RCap AMC had quoted a rate of 0.00009 per cent followed by UTI AMC at 0.0025 per cent, HSBC AMC at 0.0043 per cent, ICICI Prudential at 0.0061 per cent and Birla Sun Life at 0.05 per cent.