India Infoline, a one-stop financial services firm, has received approval in principle from the Securities & Exchange Board of India (Sebi) for its local mutual fund business. The firm is now in the process of setting up the business, which is expected to take at least six months.

ôWe expect mutual funds to be the vehicle of choice for retail investors to participate in the equity markets. An entry into the mutual funds space is an opportunity for us to continue to expand our offerings under the financial services domain in line with our long-term strategy,ö says R Venkataraman, executive director at India Infoline.

In venturing into the local fund management business, India Infoline will build on its current investment research capability and distribution strengths, Venkataraman says. He notes that at present, the firm has around 60 investment research professionals.

India Infoline is engaged in the businesses of equities broking, wealth advisory services and portfolio management services. It offers broking services in the cash and derivatives segments of the National Stock Exchange as well as the cash segment of the Bombay Stock Exchange. It recently launched its investment banking and institutional broking business.

Venkataraman expects the local mutual funds business to be up and running within six to nine months.

ôIt will take that long because we have to make sure that everything is in place and we are ready with our initial offering of equities funds,ö says Venkataraman, adding that the firm is in the process of looking into information technology requirements.

The mutual fund business, once fully operational, will also offer fixed-income funds.

Venkataraman says the local mutual funds business should not get in the way of the firmÆs distribution of other mutual funds, in the same way that several banks in Asia run an internal fund house while at the same time distributing funds for third-party providers.

ôWe see the business complementing what we are already doing now,ö he says.

Venkataraman and India Infoline chairman Nirmal Jain are overseeing the setting up of the local mutual fund business. Venkataraman says it is too early to tell how large the operation will be in terms of staffing.

India InfolineÆs distribution network is spread across 886 business locations in 350 cities and towns in India. The firm is part of the India Infoline Group, which is a major financial services provider in India.

Meanwhile, India Infoline recently hired Deepesh Pandey and Manish Srivastava as co-heads of its investment team for its overseas asset management business in Singapore, IIFL Capital. Pandey was previously the deputy CIO of Mirae Asset in Singapore, while Srivastava was a fund manager at Halbis, also in Singapore.

With offices in Singapore, Dubai and New York, IIFL Capital aims to offer India-focused equity products and fund management and advisory services for offshore customers as well as domestic wealth management customers. Looking ahead, after achieving critical mass in India-focused products, IIFL Capital also aims to offer products for other Asian markets.

ôWhile we remain focused on financial services, we keep diversifying and adding business lines which are synergistic to our core competency and at the same time, which help de-risk our business model,ö says Jain. ôNotwithstanding the current turbulence in the global financial services business market, the company remains confident of IndiaÆs long-term prospects.ö

India Infoline believes that India is one of few economies in the world that will continue to attract foreign capital owing to its capacity to absorb capital productively.

For the overseas asset management business, India Infoline will focus on the developed marketsÆ investor base of pension funds, endowment funds, mutual funds, high-net-worth individuals, and sovereign funds for India equity exposure in asset allocations.