Mutual funds hike exposure to Reliance Industries; lower valuations attractive

NEW DELHI: Shares of Mukesh Ambani-led Reliance Industries may have traded weak on the bourses in the recent months, but mutual funds have enhanced their exposure to the stock, attracted by its lower valuation.

More than 200 mutual fund schemes purchased fresh RIL ( Reliance Industries Ltd) shares, worth an estimated Rs 1,500 crore at current value, during the last quarter.

In contrast, about 100 schemes sold RIL shares from their portfolio during the quarter ended September 30. These shares are worth about Rs 350 crore at the current market price.

The MF schemes having purchased fresh RIL shares during the quarter also included those from Anil Ambani-led group's Reliance MF, the country's biggest fund house.

Interestingly, the RIL stock fell sharply by about 11 per cent during the July-September 2011 quarter.

In the past one year, RIL stock has dipped by over 20 per cent and hit a 52-week low of Rs 713.55 on August 26, 2011 and is currently trading near Rs 884 level.

But, RIL figures prominently on the portfolios of various MF schemes, by virtue of being the country's most valued firm and its high weightage on key market indices including Sensex.

MFs collect money from various investors, including the retail participants, for their different schemes and then invests the same in stocks, bonds and other securities.

One fund house generally runs a number of schemes for different market segments.

RIL is the second most-held stock after ICICI Bank by all the fund houses together. It figures on the portfolios of more than 300 MF schemes and all the funds together held RIL shares worth about Rs 6,800 crore at the end of September.

An analysis of quarterly portfolio disclosures of various funds shows that as many as 210 schemes together bought more than 1.7 crore fresh shares of RIL during the last quarter.

On the other hand, about 41 lakh RIL shares were sold by a total of 97 MF schemes during the quarter.

Only two schemes, belonging to Franklin Templton MF, had no change in their RIL holding during the quarter.

Those having sold RIL shares included only one Reliance MF scheme, while about a dozen schemes of the fund house purchased fresh RIL shares during the quarter.

Besides, the shares were also bought by various schemes of ICICI Pru, UTI, HDFC, Birla Sunlife and Franklin Templeton.

Interestingly, Reliance MF had lowered its exposure to RIL in the last fiscal.

On its part, RIL continued to avoid Reliance MF for its investment needs during the fiscal ended March 31, 2011, even as it parked money in a host of schemes from other funds.

A host of other funds had cut their RIL exposure during the last fiscal and the stock lost its position as the top- held stock for overall mutual fund space to ICICI Bank.

Source: EconomicTimes

Reliance mutual fund pips HDFC MF to become most profitable fund house

NEW DELHI: Reliance mutual fund has overtaken HDFC mutual fund to become the country's most profitable fund house, as per their profit figures for the latest financial year.

For the financial year 2011, profit after tax of Reliance MF stood at Rs 261 crore, while that of HDFC MF was Rs 242 crore.

On year-on-year basis, Reliance Asset Management company's PAT rose by as much as 34 per cent in the Fiscal 2011, whereas HDFC MF's profit increased by 16.34 per cent, according to the Association of Mutual Funds in India's data.

While UTI MF's figures were not available for the latest fiscal, Franklin Templeton is currently ranked the third most profitable with a PAT of Rs 97 crore (for fiscal year ended September 2010).

Most of fund houses follow April-March financial year. Others in the top ten include Birla Sun Life AMC with a PAT of Rs 85 crore, followed by SBI AMC (Rs 79 crore), ICICI Prudential AMC (RS 72 crore), DSP AMC (47 crore), Tata AMC (17 crore) and Kotak AMC (Rs 11 crore).

Meanwhile, on September 27, speaking at the Annual General Meeting of Reliance Capital, Anil Ambani had said that the talks for a stake sale in its asset management business to Nippon were also in advanced stages.

The company also plans to take its asset management businesses to other emerging markets and would look at further expansion of its wealth management and private equity businesses, Ambani had said.

Source: Economic Times

HDFC MF overtakes Reliance MF to become largest fund house

NEW DELHI: HDFC Mutual Fund with an average asset base of Rs 91,827.11 crore has overtaken Reliance MF to become the country's largest asset management company.

This is the first time since 2009 that the average assets under management (AUM) of Reliance MF fell below the Rs 1 lakh crore.

At the end of September, the AUM of Reliance MF declined by Rs 10,598.72 crore or 10 per cent to Rs 90,660.60 crore.

HDFC MFs asset base too witnessed a decline of Rs 205.79 crore or 0.2 per cent to Rs 91,827.11 crore at the end of September.

Reliance Capital Asset Management CEO Sundeep Sikka had earlier said that the company was focusing on increasing its retail customers base, rather than on bringing AUM through institutional investors.

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.

The MF industry witnessed decline in their average AUM by Rs 31,255.34 crore or 4.2 per cent, as per the data available with industry body Association of Mutual Fund Industry (AMFI).

The combined average AUM was Rs 7,43,083.91 crore in end-June.

Besides, ICICI Prudential MF and UTI MFs assets declined 5.7 per cent and 9.4 per cent. At the end of September quarter, ICICI Prudential's AUM stood at Rs 75,217.10 crore and UTI MF's at Rs 62,579.86 crore.

The industry has seen an AUM decline of 5 per cent in December quarter and 2 per cent in March quarter. This was followed by a 6 per cent increase in the June quarter.

As many as 22 players witnessed a decline in their AUM in the September quarter.

Among the other players Birla Sun Life MF saw their average assets declining 4.8 per cent to Rs 64,217.03 crore. Also SBI MF average AUM fell 0.3 per cent to Rs 47,731.39 crore.

Source: Economic Times