AMCs' average assets rise 19.5% in FY13

Majority of top 10 players outperform industry's growth, thanks to high inflows in debt funds and gains in stock indices

India’s asset management companies (AMCs) have seen a rise of 19.5 per cent in their average assets under management (AUM) in FY13. After dipping to less than Rs 7 lakh crore in the previous financial year, the sector has made a smart comeback —thanks to the high inflows in the debt funds and gains in the stock indices.

Interestingly, majority of the top 10 players have outperformed the industry's growth with a wide margin. For instance, Birla Sun Life Mutual Fund, ICICI Prudential MF, Kotak MF, IDFC MF and SBI MF, among others, registered a growth of between 25 and 40 per cent during the year. On the other hand, giants such as HDFC MF and Reliance MF managed to post a growth of 13 per cent and 21 per cent, respectively.

Srinivas Jain, chief marketing officer of SBI Mutual Fund, the sixth largest fund house with an average AUM of close to Rs 55,000 crore, says, “In FY13, we had good flows into our long-term fixed income funds and I believe that is true with the overall industry as well.” The fund house registered a whopping rise of 30.6 per cent in its AUM during the year.

According to the latest statistics available from industry body Association of Mutual Funds in India (Amfi), the sector’s average assets stood at Rs 8.16 lakh crore as on March 31, 2013, compared to Rs 6.64 lakh crore a year ago. Whereas in the quarter ended March 31, 2013, average assets grew a little less than a percentage point.

Reliance Mutual Fund, whose assets had dipped to below Rs 80,000 crore, came back strongly and inched close to its lost Rs 1-lakh crore mark with assets at Rs 94,580 crore.

Top officials at Reliance MF told Business Standard the fund house’s continued focus on retail has helped. “Our focus on non-liquid is helping us improve,” said an official.

According to Dhruva Chatterji, senior research analyst at Morningstar India, high flows in the intermediate to long-term bond funds in the debt category pushed up assets of the industry.

“Till February, our study shows there is a rise of 600 per cent in the assets of bond funds (year-on-year). Most of the assets inflows came in the second half of FY13 as expectations built up for rate cuts.”

Fund House	March'12	March'13	Growth (%)
	Average Assets Under Management
Kotak MF	25,738.06	35,361.35	37.38
SBI MF	42,041.54	54,905.44	30.59
IDFC MF	25,450.23	32,885.99	29.21
ICICI MF	68,718.49	87,835.07	27.81
Birla MF	61,142.50	77,046.43	26.01
Reliance MF	78,111.79	94,580.19	21.08
Franklin MF	34,492.67	41,564.26	20.5
UTI MF	58,922.14	69,450.39	17.86
HDFC MF	89,878.74	1,01,720.27	13.17
DSP BR MF	29,298.26	32,342.32	10.38
Industry	6,64,791.56	8,16,399.53	22.8
All figures in Rs Crore

Gilt funds, which invest primarily in government securities, attracted a consistent sum of Rs 1,000 crore for several months in the second half. “Of late, with a rise of one per cent point in short-term rates, we are also witnessing money flowing into the liquid funds with duration of three to six months,” added Chatterji.

According to experts, despite 11 months of net outflows from the equity segment during the year, rise in stock markets also helped push up the average assets of equity funds to a certain  extent.