A buoyant investor sentiment, coupled with the growth in equity markets and debt funds investments seem to have brought in some cheer for the mutual fund industry, which saw its assets under management for the year ended March 2014 surge by 10.5 per cent to Rs 910,019 crore, or an absolute increase of Rs 86,823 crore over the figure in March 2013.
This marks a break from the trend in recent years, when the sector has struggled with a decline in investor folios and the assets under management.
The industry numbers, however, fell short of the numbers till end-February 2014, which stood at an all time high of Rs 916,393 crore.
In the quarter ended March 2014, ICICI Prudential AMC became the third fund house having an average AUM in excess of Rs 1 lakh crore. The fund house moved up the ladder occupying the second spot as it replaced Reliance Mutual Fund and inched closer towards the industry leader (in terms of AUM) HDFC AMC.
The assets under management for ICICI Prudential rose by almost 22 per cent or Rs 18,972 crore over the last one year, which is more than the AUM of the 12th largest AMC. While it lagged HDFC AMC by 14,127 crore in March 2013, it has closed the gap and its AUM now short by Rs 6,413 crore to that of the leader.
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The industry that has always seen the dominance of top ten players, saw the balance tilting further towards them over the last one year. While the top ten players accounted for 77 per cent of the industry AUM in March 2014, they accounted for 86 per cent of the industry’s AUM growth over the last one year, thereby increasing their dominance.
Sebi chairman UK Sinha has, in the past, raised questions on non-serious players in the industry and thereby moved to raise the minimum capital requirement for AMC’s from Rs 10 crore to Rs 50 crore in February 2014. Industry insiders feel that a higher capital requirement will result into non-serious players making an exit.