After operating for over three decades in the shadows, LIC Mutual Fund is charting an ambitious path to become a major force in India's asset management industry. The fund house, a subsidiary of the state-owned insurance giant Life Insurance Corporation of India (LIC), has set a target to amass ₹1 trillion in assets under management (AUM). Its primary strategy involves mobilizing the colossal network of its parent company, which boasts about 1.48 million insurance agents across the country.
The Agent Advantage: A Massive Distribution Push
The scale of LIC's agent force presents a unique opportunity. For perspective, there are only about 178,000 mutual fund distributors in all of India. LIC Mutual Fund plans to train and empower these insurance agents to sell its investment products. Ravi Kumar Jha, who became CEO in 2024, stated that the company has already empanelled 6,200 LIC agents as active mutual fund distributors.
"Leveraging LIC’s extensive agent network will certainly help us grow our AUM because these agents have strong relationships with customers, built on trust," Jha explained. The company is conducting structured training programs and digital modules to educate agents about mutual fund products, compliance, and advisory practices.
However, this shift is not without challenges. The core task is changing the agents' mindset from selling insurance to promoting investments. Furthermore, all agents must pass the National Institute of Securities Markets (NISM) Series V-A exam to sell mutual funds legally. An industry official pointed out a potential snag: "Many insurance agents are elderly and may not want to appear for an exam and shift to selling mutual funds."
The Stark Reality of Persistent Underperformance
Despite the distribution advantage, financial experts sound a note of caution. The fundamental hurdle for LIC Mutual Fund is the consistent underperformance of its largest equity schemes. Analysts argue that even the widest reach cannot compensate for poor returns that fail to beat market benchmarks.
Data reveals a troubling pattern. According to fact sheets, the fund house's flagship equity schemes have lagged behind their benchmarks over a five-year period ending November 2025. The LIC Large Cap Fund delivered a 14.75% CAGR, compared to its benchmark's 16.65%. The Large & Mid Cap Fund returned 17.74% against a benchmark of 21.12%, and the Flexi Cap Fund yielded 15.58% versus an 18.61% benchmark return.
Bhavana Acharya, co-founder of Prime Investor, noted that LIC MF schemes often rank in the middle or bottom of their categories. "An AMC typically garners assets in two ways: through its own distribution network, or through outperformance that draws attention to the funds. If performance is poor, it will be difficult to attract investors," Acharya emphasized.
A Plan for Revival: Beyond Distribution
Acknowledging the performance gap, CEO Ravi Kumar Jha outlined a multi-pronged strategy for revival. Beyond the agent network push, the company is strengthening its investment team, which now has 14-15 specialists across equity, debt, and passive strategies.
"We aim to improve scheme performance by reinforcing our research and risk management frameworks and adopting advanced analytics and technology to gain better market insights," Jha stated. He added that investment strategies are being continuously reviewed and aligned with macroeconomic trends.
On the physical expansion front, LIC Mutual Fund, which currently has over 50 branches, plans to grow its network to 100 branches in the coming years. This combined approach of distribution muscle and hoped-for performance improvement is central to its comeback bid.
The challenge is monumental. After 36 years of operations, LIC Mutual Fund's AUM stands at just ₹44,383 crore, a modest sum compared to peers that started around the same time. For instance, SBI Mutual Fund has grown to ₹12.6 trillion in AUM, while Canara Robeco Mutual Fund manages ₹1.2 trillion. The journey to ₹1 trillion will test whether LIC's unparalleled distribution can finally translate into a successful and performance-driven mutual fund story.
