New Delhi: Reliance Mutual Fund has overtaken rival HDFC MF in terms of full-year profits, but has slipped below the latter to the second position in terms of their latest assets base.
The average Asset Under Management (AUM) of Anil Ambani group firm Reliance Mutual Fund dipped by over Rs 10,500 crore during the three-month period ending September 2011, making it the second-largest fund house after HDFC MF.
However in terms of profitability, Reliance MF clocked a higher profit after tax than HDFC MF in the latest financial year, becoming the most profitable fund house in the country, according to data released by mutual fund industry body AMFI.
The profit after tax of Reliance Assset Management Co, which runs Reliance MF stood at Rs 261 crore, while that of HDFC AMC was Rs 242 crore at the end of March 2011. In the previous year, HDFC AMC was the country's most profitable fund house.
On year-on-year basis, Reliance Asset Management company's Profit After Tax (PAT) rose by as much as 34 percent in the fiscal 2011, whereas that of HDFC AMC increased by 16.34 percent.
On the other hand, Reliance MF lost its top position as its asset base fell to Rs 90,660.60 crore, according to the quarterly data compiled by AMFI. It was over Rs 1.01 lakh crore at the end of June quarter.
Sundeep Sikka, CEO of Reliance Capital Asset Management Company, told PTI over phone that the fund house was mainly focusing on retail money and less on institutional money.
"Retail money though is expensive in the initial stage (for the fund house), it adds to the quality of the AUM and the profitability of the company in the long run," he added.
"We have more than 21 lakh systematic investment plans for which we are getting Rs 5,000 crore per annum and this money is majorly adding to our profitability," Sikka said.
HDFC Mutual Fund has now become the largest fund house in the country in terms of AUM. At the end of September, the AUM of HDFC MF stood at Rs Rs 91,827.11 crore.
As at the end of September, the average assets managed by the mutual fund industry, consisting of 41 active players, stood at Rs 7.12 lakh crore. It declined by Rs 31,255.34 crore or 4.2 percent from the end of June quarter.