HDFC AMC, Aditya Birla Sun Life AMC hit 52-week lows in a firm market

Shares of Aditya Birla Sun Life AMC hit a low of Rs 569, its lowest level since listing on October 11, 2021

Shares of HDFC Asset Management Company and Aditya Birla Sun Life AMC hit their respective 52-week lows on the BSE in Thursday's intra-day trade.

HDFC AMC, the investment manager to HDFC Mutual Fund (HDFC MF), was down 2 per cent to Rs 2,411.15, breaching its previous low of Rs 2,427.10, touched on November 29, 2021. In the past three months, the stock has underperformed the market by declining 27 per cent as compared to a 2.4-per cent fall in the S&P BSE Sensex.

HDFC AMC is among the largest and profitable mutual funds with an AUM of around Rs 4.4 trillion as on September 2021. However, HDFC AMC's market share loss was faster for April-September period (H1FY22) while industry flows have turned positive.

"Impact of lower market share is due to lower share of gross inflows, which is generally attributed to two reasons -- large part of inflows is through NFOs (net new flows were Rs 68,497 crore of which Rs 42,591 crore came through NFOs), and international funds as lot of domestic players are now focusing on investing in international markets," analysts at ICICI Direct said in Q2 results update.

However, the brokerage firm remains positive on the strong brand franchise and efficient operational strength but sees near-term concerns over losing market share.

Shares of Aditya Birla Sun Life, meanwhile, were down 1 per cent to Rs 569 in the intra-day trade. It, too, fell below its previous low of Rs 570 hit on November 29. The stock was quoting at its lowest level since its listing on October 11, 2021. Currently, it was trading 20 per cent below its issue price of Rs 712 per share.

The retail participation and inflows into mutual funds and other market-linked products are heavily influenced by market performance and sentiment. Any downturn or volatility could make investors shy away from market-linked products and push them towards less-riskier assets.

"Investors have been gradually shifting from physical assets to financial assets. Additionally, they have also been reallocating their savings to mutual funds in recent years. However the overall mutual fund penetration in the country remains low. In addition, insurance products such as unit-linked investment products, which provide dual benefits of protection and long-term savings, are competing for market share," HDFC Securities had said in an IPO note.