Reliance Mutual ranks No.1 in profitabilityOctober 4th, 2011 - 6:58 pm ICT by IANS
Chennai, Oct 4 (IANS) With an after tax profit of Rs.261 crore for the year ended March, 31, 2011 India’s largest mutual fund Reliance Capital Asset Management Ltd (RCAM) has turned out to be the most profitable fund house overtaking HDFC Asset Management Company (HDFC AMC).
As per figures released by Association of Mutual Funds in India (AMFI) Monday, HDFC AMC closed last fiscal with a net profit of Rs.242 crore.
Speaking about the revised pecking order, RCAM president and CEO Sundeep Sikka told IANS over phone from Mumbai: “It is result of right product mix and reducing transaction cost. Further, we are now focusing on the retail segment, moving away from the institutional sector.”
This fiscal, while RCAM’s first quarter income went up by two percent to Rs.167.4 crore as compared to corresponding period of the previous year, the before tax profit increased by 23 percent to Rs.70.9 crore.
On reduction in expenses Sikka said: “Quarter-on-quarter, the expenses are not going up but the profitability goes up. We have come to a point were the incremental growth contributes to the profitability while the costs do not go up.”
According to him, RCAM is focusing on reducing transaction costs by leveraging technology.
“Nearly seven to eight percent of the investors use the online facility which brings down our cost drastically,” Sikka said.
He said the company currently handles three crore transactions and has built capability to handle 30 crore transactions and can accept investments from 75,000 touch points.
Queried whether the company would reduce costs if it rationalised its 45 schemes Sikka said: “All our schemes are big and each fund has a mandate. Only when a fund is less than Rs.100 crore then it becomes unviable of us.”
The other fund houses figuring in the top five are Franklin Templeton AMC, Birla Sun Life AMC and SBI AMC and logged growth in profits last fiscal.
On the other hand, fund houses like ICICI Prudential AMC, Tata AMC and Kotak AMC experienced a fall in their profitability last fiscal as compared to 2009-10.
- Reliance Capital starts mutual fund service through SMS - Aug 29, 2012
- Reliance Mutual bets big on retail investors - Oct 02, 2011
- Reliance Capital arm launches mobile-based payment system - Aug 09, 2012
- Reliance Mutual looking for foreign partners to go global - Oct 02, 2011
- Reliance Capital gets regulator's nod to sell stakes to Nippon Life - Jun 13, 2012
- Reliance Mutual Fund launches small cap fund - Aug 25, 2010
- Reliance gold fund attracts 200,000 applications - Mar 09, 2011
- Reliance Capital Q3 net profit up 229 percent - Feb 10, 2012
- Reliance Mutual open to silver, platinum funds - Feb 16, 2011
- Mutual funds body not to launch transaction platform - Jan 29, 2010
- Reliance Mutual Fund launches gold savings fund - Feb 09, 2011
- Reliance Capital ties up with Indian Overseas Bank - Sep 13, 2012
- Magma's Q2 income up 27 percent - Oct 17, 2011
- HDFC Bank third quarter net profit up 31.2 percent - Jan 19, 2012
- HDFC Q2 profit jumps 22 percent to Rs.807.54 crore - Oct 18, 2010
Tags: amfi, asset management company, asset management ltd, birla sun life, capital asset management, crore, franklin templeton, icici prudential, incremental growth, institutional sector, leveraging technology, quarter income, rcam, reliance capital, retail segment, sikka, sundeep, tata amc, tax profit, transaction cost