The mutual fund industry or asset management industry in India started in 1963 with the formation of Unit Trust of India, under the aegis of the Government of India and Reserve Bank of India. But it was not until 1993 when the entry of private sector mutual fund houses happened. From 1993 when the investor asset size was a mere Rs 47,000 crore, the AMC market has grown to Rs 25 lakh crore in 25 years.
The number of mutual fund houses went on increasing, with many foreign mutual funds setting up shop in India and also the industry witnessing several mergers and acquisitions. Now there are roughly two dozen AMCs in India.
Here’s a look at the top five asset management companies in India in terms of quarterly average assets under management (AUM). We are not indicating that the largest AMCs are necessarily the best but it’s just the plain ranking of AMCs based on AUM.
ICICI Prudential Mutual Fund – IPru is the largest mutual fund house in India. It reported a quarterly average AUM (QAAUM) of a whopping Rs 3.1 lakh crore (at the June-2018 end). The AMC is a joint venture between ICICI Bank and UK’s Prudential Plc. Through years of the joint venture, the company has forged a position of pre-eminence in the Indian MF industry. The AMC has witnessed substantial growth in scale; from two locations and six employees at the inception of the joint venture in 1998 to a current strength of over 1,900 employees with a reach across over 200 locations. It is estimated to have an investor base of more than 3 million investors. Nimesh Shah is the CEO & MD. Sankar Naren is the ED & CIO, while Rahul Goswami is the CIO – Fixed Income.
HDFC Mutual Fund – Following IPru closely is HDFC Mutual Fund in the second spot. The AMC manages a QAAUM of Rs 3.06 lakh crore. This AMC is a joint venture between HDFC and Standard Life Investments. The company began its journey in 1999. With organic growth and acquisitions (Zurich India and Morgan Stanley MF) the company has managed to be the market leader across industry parameters. Over the past five years, HDFC AMC has seen strong AUM growth of 25% CAGR (FY13-18). Revenues and profits grew at a CAGR of 20% and 18% respectively. Like IPru, it enjoys a strong distribution network (bank), strong parentage, solid brand image and robust financial growth. The AMC did a successful Rs 2,800-crore IPO and investors were enthused with its higher mix of high-margin equity oriented AUM and consistent RoE of over 30%. Milind Barve is the CEO. Prashant Jain is ED & CIO. The company enjoys a market value of over Rs 35,000 crore.
Aditya Birla Sun Life Mutual Fund – ABSL MF is the third largest with a QAAUM of Rs 2.49 lakh crore. Aditya Birla Sun Life AMC Limited (formerly known as Birla Sun Life AMC) is a joint venture between the Aditya Birla Group and the Sun Life Financial Inc. of Canada. It was established in 1994. The MF boasts of an impressive mix of reach, a wide range of product offerings across equity, debt, balanced as well as structured asset classes and sound investment performance. The company has around 6.4 million investor folios. It has a pan India presence across 247 locations. A Balasubramanian is the CEO and has been with the organisation since 1994. Mahesh Patil is the co-chief investment officer and spearheads equity investments, while co-chief investment officer Maneesh Dangi oversees the fixed income investments.
Reliance Mutual Fund – Following ABSL MF closely is the 4th largest. Reliance MF reported a QAAUM of Rs 2.40 lakh crore. The company has 8.39 million investor folios. Part of the Reliance Anil Dhirubhai Ambani (ADA) Group, RMF offers investors a well-rounded portfolio of products to meet varying investor requirements and has a presence in 160 cities across the country. In Nov-2017, the AMC was the first in recent years to be listed in the Indian capital market. Reliance Nippon Life AMC is a leader in its own right. It has an annualized SIP book of nearly Rs 10,000 crore, enjoys a leadership position in retail, holds one of the highest B-30 assets (Beyond 30 cities) and its equity assets as a proportion of total assets have grown to 37%. The AMC, present across 293 locations, has 1206 employees and has over 68,000 distributors. Like ABSL MF, Reliance does not have its own bank. But that has not stopped the AMC from forging ahead. It is the only AMC with more than 15 years of experience in managing ETFs. Sundeep Sikka, ED & CEO, leads Reliance Nippon Life Asset Management. Manish Gunwani is the CIO – equity investments and Amit Tripathi is the CIO – fixed income investments.
SBI Mutual Fund – With 30 years of experience in fund management, SBI Funds Management Pvt. Ltd. has a strong lineage that traces back to the State Bank of India (SBI) – India’s largest bank. It is a joint venture between SBI and AMUNDI (France). The fund house has a QAAUM of Rs 2.33 lakh crore. It has a network of over 222 points of acceptance across India. Over the years, the fund house has steadily gained market share and risen in the ranks. A large part of its investment performance should be attributed to its equity investment management prowess. Plus, extremely strong distribution support from SBI has helped penetrate markets. Recently, SBI MF announced the appointment of Ashwani Bhatia as the MD & CEO of SBI Funds Management Pvt Ltd. Navneet Munot is the ED & CIO.