India's top asset management companies (AMCs) have continued
to remain profitable, no matter whether mutual fund investors made money or not
in the tough market conditions. Rather, top players have posted growth in their
profitability during financial year 2011-12.
Reliance Mutual Fund, despite losing its top slot to HDFC MF
during the year, continued to remain the most profitable asset manager in the
industry, with Rs 276 crore as net profit in FY12, a growth of 5.6 per cent
against Rs 261 crore in the previous financial year. HDFC MF, the country’s
largest fund house, grew faster to Rs 269 crore, growth of 11 per cent compared
with Rs 242 crore in FY11.
ICICI AMC, the third largest fund house, grew the fastest in
terms of profitability, at 22.5 per cent to Rs 88 crore against Rs 72 crore
earlier. However, Birla Sun Life AMC’s profit declined a big 30 per cent in
FY12. The numbers of UTI AMC were not available.
Sundeep Sikka, chief executive officer (CEO), Reliance AMC,
says, “The biggest factor which helped us increase our profits is our focus on
retail customers from a long-term perspective. Though acquisition of retail is
expensive, in the long term it becomes profitable. It’s an annuity business and
our commitment to investors is for the long term.”
The top five control 54 per cent of the industry’s assets
(there were 44 fund houses managing an average assets under management (AUM) of
Rs 6,64,792 crore as on March 31). These players reported rise in profits in a
year that saw erosion of a little over five per cent of the industry’s AUM,
while equity AUM dipped 6.7 per cent.
According to Dhirendra Kumar, CEO of fund tracker firm Value
Research, “The mutual fund business is a low capital one. Once a fund house
reaches the threshold, it keeps making profits. And, the more the equity
assets, it will kick up the profits of AMCs.”
Source: http://www.business-standard.com/india/news/top-amcs-rake-in-more-profits-despite-hard-times/474964/
Posts
