Principal keen on pension foray in India

US-based Principal Financial Group, with assets worth $150 billion, is keen on entering the pension insurance sector with its partners, Punjab National Bank and Vijaya Bank in India.

Sanjay Sachdev, managing director and chief executive officer of Principal PNB Asset Management and country manager of Principal International Inc, told Business Standard that the group was waiting for the formation of the pension regulatory and development authority (PRDA) and would then launch its pension scheme.

"We would be one of the first to enter the pension market in the country. The company will be entering the pension fund in collaboration with its existing partners in mutual fund," he said.

He said that the company expects the government to announce the formation of the PRDA in the next few months and was bullish on the prospects of the new fund. "The company will have an equity capital of Rs 100 crore initially and the partners are willing for the foray with new and innovative products from the parent company - Principal," Sachdev said.

According to Sachdev, the company has achieved a 150 per cent growth to Rs 5,000 crore as of September 2004 from Rs 2,000 crore earned during the same period last year. The company has over three lakh customers spread over 14 different funds with 28 schemes. Principal PNB Asset Management also plans to launch a Dividend Yield Fund soon.

In Andhra Pradesh, Principal PNB Asset Management has sold Rs 15 crore worth of mutual funds in the last 16 months. Andhra Bank had entered into a tie-up with Principal to sell the latter's products in June 2003.

In the last two months through the Principal Monsoon Retail Hungama, Rs 3.4 crore was collected from around 5,000 investors. Andhra Bank earned Rs 10 lakh as fee-based income during this period.

Sachdev also announced that taking into consideration the success of the first contest a new contest for the next two months would also be announced. "As an incentive to perform better the winner in this contest would get a chance to visit the US headquarters of Principal," he said.