New Delhi, March 27 -- The co-founders behind one of India's most successful exchange-traded funds are returning to the mutual fund industry after almost 15 years.

Rajan Mehta and Sanjiv Shah, former co-founders of the mutual fund which started India's first ETF, Benchmark Asset Management Co., have received final approval from the market regulator to launch Lakshya AMC.

"Our underlying philosophy will remain passive, and we are not going for the active route," Mehta told Mint. "Doing stock picking based on research. That's not our core thing," said the director and co-founder of Lakshya AMC.

The fund house does not plan to compete in crowded segments such as Nifty 50 or gold ETFs. "We would like to create different categories which do...