“...with the recent market correction offering potential entry points”
SBI Mutual Fund caters to retail, high net-worth individuals, corporates, and institutional investors. With the robust backing of the State Bank of India, it serves 98 per cent of the country’s pin codes, a legacy that motivates it to maintain its commitment to delivering safety, liquidity and returns. In this interview, Nand Kishore, Managing Director and Chief Executive Officer, SBI Mutual Fund, elaborates on the company’s investment strategies, options for investors and the path ahead
Congratulations on your appointment as MD and CEO of SBI Mutual Fund. Please share your vision for SBI MF in the coming years.
I am honoured to be part of an organisation that has established itself as a market leader and is now focused on shaping the future of the industry. Currently, we offer investors in India and globally, through the Amundi network, a broad spectrum of investment solutions, including mutual funds, portfolio management services, alternative investment funds, offshore funds, and services via GIFT City. Looking ahead, my vision is to continue building on our strong foundation by expanding our reach and influence, with the ambition to become the first choice for investors across all segments.
These include retail, high net-worth individuals, corporates, and institutional investors. With the robust backing of our parent, State Bank of India, we are proud to serve 98 per cent of the country’s pin codes, a legacy that motivates us to maintain our commitment to delivering safety, liquidity and returns in that order, ensuring an optimal investing experience in an increasingly dynamic and competitive landscape. At the heart of our organisation lies our guiding philosophy—STAKE, which encapsulates the values that drive us.
It aligns with our vision to ‘be the most trusted and respected investment manager to every Indian’ and our mission to be an ‘ethical, responsive, and an innovative partner in investment solutions’. STAKE stands for service, transparency, accountability, knowledge, and ethics. While these principles have always been at the core of our operations, we have now formalised them to ensure that all our stakeholders clearly understand what we stand for and can expect from us. These values will continue to shape our approach as we work to further enhance investor trust and deliver long-term value.
What are your key takeaways from the Union Budget 2025-26 regarding mutual fund investments, and how do you see the tax reliefs, particularly the reintroduction of indexation benefits for Debt Funds, influencing investor behaviour towards mutual funds?
The Union Budget for 2025 provides a timely intervention to counter the ongoing cyclical slowdown. A key measure announced by the finance minister was the reduction in taxes for the middle class under the new tax regime. Individuals with incomes above Rs 12 lakh will benefit from annual tax savings ranging from Rs 80,000 to Rs 1.1 lakh, resulting in a total tax relief of Rs 1.1 trillion – approximately 0.3 per cent of the GDP. These changes are expected to boost discretionary consumption, particularly among households earning between Rs 10-50 lakh.
Additionally, the budget emphasises savings by making debt funds more tax-efficient, particularly for investments made after April 2023. With the introduction of rebates and higher exemption limits, investors can realise substantial tax savings. The revamped tax structure is likely to position mutual funds as a more attractive, stable, and tax-efficient investment option, encouraging greater investor participation, portfolio rebalancing, and a stronger focus on tax planning and investment strategies.
The budget has focused on sectors like agriculture, infrastructure and green energy. Which sectors do you believe will see the most significant capital inflows into mutual funds, and why?
The government’s increased budget allocations show its commitment to the ‘Viksit Bharat’ agenda, emphasising infrastructure and green energy. Mutual funds targeting these sectors are expected to see significant inflows. Infrastructure spending is projected to grow by 8 per cent year-on-year, driven by urban development and enhanced rural initiatives. Green energy is also poised for rapid growth due to strong policy support and global sustainability trends. Initiatives like the mission to develop smart cities are a part of the infrastructure development process and will contribute to attracting higher investments.
Discretionary consumption is expected to benefit from rising incomes as India’s GDP nears USD 3,000 per capita, with lower taxes in the Union Budget serving as a tailwind. Despite recent challenges, manufacturing and investment cycle-related sectors present long-term opportunities, with the recent market correction offering potential entry points. As the first full-year budget of the current government’s third term, it addresses challenges like crude oil volatility and government debt reduction, with fiscal discipline as a key priority.
How do you interpret the current macroeconomic trends in India, especially in terms of growth, inflation, and interest rates?
Growth projections for FY25 have been revised downward to 6.4 per cent, with FY26 expected to close at 6.5 per cent. Lower government spending in the first half of FY26 may impact growth, and concerns over food inflation have eased due to lower vegetable prices. However, rising imported energy costs pose a new risk. FY25 inflation is expected to be 4.8 per cent, with FY26 CPI forecasted at 4.2 per cent, offering a favourable environment for growth-supportive measures.
The monetary policy in India has been easing, with the Reserve Bank of India adopting a neutral stance and implementing rate reductions. The focus remains on liquidity actions to ensure effective transmission. Despite policy rate cuts, borrowing costs for the private sector remain high, highlighting the need for sustained improvements in liquidity. As the government addresses these economic challenges, a balanced approach will be crucial for long-term stability and growth.
Can you share some insights into SBI Mutual Fund’s performance in 2024? Which schemes have particularly excelled, and what were the key drivers behind their success?
In 2024, SBI Mutual Fund observed a notable increase in interest towards Hybrid Funds and Large-Cap stocks, driven by the current economic environment. Investors sought stability and diversified exposure, making these categories particularly attractive. To meet evolving investor needs, we launched several new fund offers (NFOs) across passive, sectoral, and commodity segments where we identified opportunities. This approach has allowed us to effectively respond to market dynamics and deliver value to our investors.
Given the digital transformation in financial services, what steps is SBI MF taking to make investments more accessible and inclusive for investors?
The year 2024 has been a landmark year for digital transformation, marked by rapid growth and widespread adoption across various domains. Each month saw the launch of new features and schemes, significantly enhancing our digital offerings across different asset classes. Among the key achievements were the introduction of smart statements, which provide a comprehensive and user-friendly overview of financial activities, and the streamlined KYC process via the YONO app, ensuring a simplified and efficient user experience. Additionally, we enabled fast transactions for quicker financial operations and introduced the ‘consolidate folio’ feature, allowing users to merge multiple folios into a single, unified account.
These innovations have resulted in the impressive registration of 7,87,560 new digital KYC users, reflecting a remarkable growth of 80 per cent as of January 2025. We recently launched the Jan Nivesh SIP starting at just Rs 250 daily, enabling digital investments in one of our hybrid funds through our website and app, and other financial technology partners. This initiative aims to promote digital financial inclusion across the country. We remain committed to further elevating the digital experience with enhanced security measures and an improved transaction journey, ensuring our users continue to benefit from cutting-edge digital solutions.
As we look towards the next fiscal year, what are the significant challenges and opportunities you foresee for the mutual fund industry in India?
As we approach the next fiscal year, the mutual fund industry in India stands at a crucial juncture, facing a mix of challenges and opportunities. Economic uncertainty driven by inflation, global market volatility, and cautious monetary policy could lead to market fluctuations and reduced investor sentiment. Additionally, ongoing regulatory changes and increased competition are expected to test the resilience and adaptability of fund managers. On the flip side, several promising opportunities are emerging. A rising middle class and improved financial literacy are expanding the investor base.
Meanwhile, favourable policy measures such as tax benefits for debt funds are making mutual funds more attractive. Furthermore, digital transformation streamlines distribution channels, lowers entry barriers, and enables more personalised investment solutions. The proposed Direct Tax Bill aims to simplify tax laws and introduce a Taxpayer’s Charter, will further enhance transparency and reduce bureaucratic hurdles, benefiting mutual funds and investors. Organisations that adapt to these trends and innovate accordingly will be well-positioned for growth and stability.
Lastly, what advice would you give to new investors looking to enter the mutual fund market in the current economic climate?
Given the current volatility and geopolitical scenario, new investors should focus on a long-term, diversified investment strategy. Central to any investment approach is the concept of asset allocation, which involves spreading investments across various asset classes such as equity, debt and commodities. This helps to mitigate risks and optimise returns, especially during unpredictable market conditions. Awareness of one’s financial goals and patiently investing in achieving them are crucial. Seeking advice from a financial advisor can help you navigate complexities, better manage investment strategies during market fluctuations, and maximise long-term growth opportunities for your portfolio.
Disclaimer: The opinions expressed above are personal and may not reflect the views of Dalal Street Investment Journal.