MFs see sharp asset growth on new offers

NEW DELHI: A large number of new fund offerings and a sharp stock market rally have led to an unprecedented growth in the asset size of the Indian mutual fund industry last month, credit rating agency Crisil said on Monday.

Mutual funds' assets under management (AUM) grew by Rs 86,000 crore in July to a corpus of Rs 4,89,000 crore. Growth of this magnitude in a single month has rarely been seen in the Indian mutual fund industry, Crisil said in a release.

The large number of new fund offerings, the sharp rally in the equity markets and liquid fund inflows, drove these levels of AUM growth, Crisil's Fund Services and Fixed Income Research Head Krishnan Sitaraman said.

All of Crisil's fund indices ended positive for the fourth consecutive month and returns were higher than in the previous month's, mainly due to robust market performance, the agency said.

Crisil is a majority-owned affiliate of Standard & Poor's, a division of The McGraw-Hill Companies.

Reliance Mutual Fund continued to top the AUM chart with AUM in excess of Rs 66,000 crore, while ICICI Prudential Mutual Fund took the second spot with AUM of Rs 48,700 crore. UTI Mutual Fund was third with AUM of Rs 42500 crore. In the secondary market, mutual funds were net sellers to the extent of Rs 900 crore in July, after being net buyers of Rs 700 crore in June.

In July, the Cabinet Committee on Economic Affairs allowed Navaratnas and Miniratnas in the public sector to invest up to 30 per cent of their surplus funds in public sector equity mutual funds.

As a result, after a nine-year gap, these organisations can again invest in equity mutual funds. The move could result in investment flows of Rs 60,000 crore into the sector from cash-rich public sector undertakings.