The asset management arm of IL&FS has already received an approval from SEBI to come out with a mutual fund scheme about three months back and is currently working out the modalities of its maiden scheme.

"We have already received approval from SEBI for entering the domestic market. Now, we are waiting for the market conditions to improve before we plan on the type of scheme," said IL&FS AMC managing director Vibhav Kapoor.

The asset pmanagement company has not decided on the kind of scheme that they will float. But the inclination of this AMC is more towards equity schemes even though currently investors have an appetite for income schemes. If the AMC comes out with an equity scheme they are aiming at a mobilisation of Rs 50 crore. "We will start with a small corpus andsubsequently with performance and establishment of a good track record we will attract more investors," said Kapoor.

"We are keeping a watch on the market. Other mutual funds have not been able to garner substantial sums and it is with this view that we are still waiting." said Kapoor. Kapoor said that investors are unhappy with the happenings over the past five years when the mutual fund industry was opened for private sector participation. "The investors have suffered heavily as not much money has been made by them even for investments over long periods of four to five years. They have lost their confidence in the mutual fund industry. The low confidence levels towards the industry is hampering its growth," said Kapoor. He said that when most of the listed schemes are available at huge discounts to their net asset value, it is unlikely that new investors would come to the new schemes.

"This is because investors can enter existing schemes at huge discounts to their NAV that are about to be redeemed andthus make their profits," he added.