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Turmoil in Top AMCs

Very few asset management companies have emerged with profits

There is no doubt that the year 2008 was extremely difficult for the mutual fund business as well as all those who are related to it, including the retail investor. The falling equity markets and liquidity crisis hit the industry very hard and also have surely affected their prospects immensely.

The loss can be gauged from the plunging figures, The average assets under management (AAUM) of the mutual fund industry shrank by around 7.7 per cent in the one year period ending March 2009. (See: The AAUM Story in 2008-09)

Reliance Capital Asset Management Company, the biggest asset management company (AMC), according to AAUM, lost around 10.97 per cent of its assets during the period. Its profit also contracted, by as much as 16 per cent over the same time span. Its profit after tax (PAT) too declined to Rs 126 crore for FY09 from Rs 150 crore in the previous year.

In the same vein, ICICI Prudential AMC saw a steep decline of 98.78 per cent in its PAT in FY09. Its AAUM shrank by around 5.33 per cent over this period.

However, among the top AMCs, two managed to come out of the turmoil unscathed. Both HDFC and Birla Sun Life AMCs have registered profits for the FY09.

HDFC AMC saw a rise of 15.17 per cent in its profit before tax (PBT), increasing from Rs 240.33 crore to Rs 276.78 crore. The rise in AUUM by 29.44 per cent in FY09 helped it grab second position from ICICI Prudential MF.

The second party that managed to show profits was Birla Sun Life AMC. Its AAUM grew by 31.14 per cent; this has helped the AMC grow its profit from Rs 2.8 crore in FY09 to Rs 7.9 crore in FY09.

Top AAUM Gainers/Losers