Listing won't alter our investment philosophy: ICICI Pru AMC MD & CEO

India is a market where scalable businesses with lower margins and higher volumes create enduring value, says Nimesh Shah, managing director (MD) and chief executive officer (CEO) of ICICI Prudential AMC. In an email interaction with Abhishek Kumar, amid the asset manager’s Rs 10,603-crore IPO, Shah said growing volumes will continue to support profitability and will more than offset the telescopic pricing impact. Edited excerpts:

 

As a listed company, how will you ensure shareholder pressure for earnings does not conflict with investor interests and risk management? 

The Indian mutual fund industry has been built on a strong regulatory foundation that ensures transparency and a pure-play product for investors. One of its greatest strengths is how the Securities and Exchange Board of India (Sebi) has aligned the interests of investors, distributors and asset managers. An AMC grows only by creating value for its unitholders. When we stay aligned to investor interest, they stay invested longer and allocate more, which naturally drives revenues.

 

Risk management has been central to our journey as we scaled across equity, hybrid, debt, passive, PMS and other alternate strategies. We have built processes designed for scale and resilience, which is why we often describe ourselves as a risk-management company that manages money. These processes do not change because we are listed. Listing does not alter our investment philosophy, fiduciary duty or risk culture.

 

In the MF space you have over 140 schemes across equity, hybrid, debt and passive. Is the bouquet complete or are there more possibilities? 

We operate across every major segment of the asset management business. Our 143 schemes span active funds, passives, ETFs, thematic and diversified equity strategies, hybrid funds, fixed income, liquid funds and a fast-growing alternate platform. This breadth allows us to meet diverse investor needs across market cycles, and it reflects in the scale we manage.

 

As of September 2025, our active MF market share stood at 13.3 per cent, and we are the largest AMC in equity-oriented and hybrid schemes. With Sebi introducing a new framework for SIFs, we will also be launching products under that regime.

 

Given the growing size of your equity and hybrid schemes and telescopic pricing, how do you plan to sustain high profit growth?

  Telescopic pricing is the order of the day. Increase in volume compensates for the fall in margins. India is a market where scalable businesses with lower margins and higher volumes create enduring value. Through our competitive pricing, we build trust, strengthen competitiveness and support sustainable profitability.

 

Our financial performance reflects this: operating profit before tax was Rs 3,236 crore in FY25 and Rs 1,933 crore in the first half of FY26. Even with stable operating margins of 0.36 per cent in FY25 and 0.37 per cent in H1 FY26, profit growth has remained strong because this is fundamentally a volume-driven business.

 

With the number of players increasing rapidly, is market share dilution inevitable? Is it a concern?

  While the number of AMCs has increased, market share over the long term tends to consolidate around players with consistent performance and long-term track records. Our own experience reflects this.

 

Take our hybrid suite: as of September 2025, we had the largest equity-oriented hybrid quarterly average assets under management (QAAUM) in the industry at Rs 1.9 trillion with a 25.8 per cent market share. This position has been maintained across March 2023, March 2024, March 2025 and September 2025 — showing that even as the industry expands, we have continued to strengthen our standing.

 

What are the growth plans at the AMC level? Are you looking at new areas? 

We operate in an economy that is structurally positioned for long-term growth. As market levels rise over time, our AUM grows in line. A second engine of growth is systematic transactions franchise, which provides steady, long-term growth.

 

Our fund performance has been strong, with 90 per cent of our equity funds beating benchmarks. We have also expanded our alternates business (comprising PMS, AIFs and offshore advisory services), real estate, and private strategies which have grown sharply and remain a strategic priority. Together, our MF, alternates and advisory platforms position us well for the next phase of growth.

 

MF industry growth has decelerated this year, especially in net equity inflows and new investor additions. What caused the slowdown and when do you see growth picking up?

  Taken together, FY25 and the first half of FY26 show that both mutual fund and alternate flows remain broadly aligned with the trajectory of recent years. Industry equity and equity-oriented QAAUM reached Rs 41.8 trillion by September 2025 versus Rs 36.29 trillion in FY25, indicating healthy expansion. Systematic flows, equity inflows and hybrid flows remain strong on a cumulative basis.

 

Short-term variations are natural in any market-linked business, but the underlying drivers remain intact. Financialisation continues, digitisation, investor participation is widening and awareness is improving. These structural forces reinforce our confidence in the long-term growth story.

 

You believe operating profit after tax (OPAT) is the most appropriate profitability metric for the industry. Why? 

Investors often focus only on PAT, but PAT can be influenced by the size of a company’s investments. A larger balance sheet will naturally generate higher investment income even if the core business is not strong. Operating profit is therefore a more relevant measure. OPAT reflects only the profitability derived from investment-management fees and provides a clearer view of the operating performance, which is driven by the scale and composition of assets. ICICI Prudential AMC accounted for roughly 20 per cent of the industry’s operating profit in FY25, making it the largest profit pool among Indian asset managers.