Post rebranding, inflows into equity, liquid funds of Nippon India MF increase

Suresh P Iyengar Mumbai | Updated on December 18, 2019 Published on December 18, 2019

Sundeep Sikka, ED and CEO, Nippon India Mutual Fund

High networth individuals, corporates return to the fund

The change of name and fresh branding exercise has been positive for Nippon India Mutual Fund (formerly Reliance Mutual Fund) with inflows into both its equity and liquid funds increasing substantially, even as the industry haswitnessed a slowdown in inflows into these schemes.

Inflows into the liquid and overnight schemes of Nippon India rose 27 per cent in November to Rs 33,907 crore, from Rs 26,800 crore registered in September.

On the other hand, inflows into the liquid and overnight funds of HDFC Mutual Fund, ICICI MF and Aditya Birla MF declined 3.5 per cent, 3.1 per cent and 14.7 per cent to Rs 1.01 lakh crore (Rs 1.04 lakh crore), Rs 67,922 crore (Rs 70,118 crore) and Rs 48,763 crore (Rs 57,193 crore), respectively.

Inflows into SBI MF were up 6 per cent at Rs 58,440 crore (Rs 54,992 crore).

The increase in inflows into the Nippon India and SBI MF liquid funds has come even as top corporates have defaulted on repayments on their bond issues, leading to side-pocketing and write-down of the bad assets by mutual funds.

Inflows into equity funds slide

On the equity side, Nippon India’s inflows increased six per cent in November to Rs 91,703 crore, against Rs 86,705 crore logged in September, in line with other leading fund houses.

However, overall inflows into the equity funds of the mutual fund industry plunged 80 per cent in November to Rs 1,312 crore, against Rs 6,609 crore recorded in September.

Meanwhile, the equity assets under the management of mutual funds have increased to Rs 7.62 lakh crore (Rs 7.24 lakh crore) in the last two months, as the equity markets hit a new high, increasing the value of previous investments.

Top corporates, HNIs return

Sundeep Sikka, ED and CEO, Nippon India Mutual Fund, said the fund house saw the return of many leading corporates and high networth investors after Nippon (Corporation) completed the deal to become the single largest sponsor, changed the name of the asset management company and invested in re-branding, to gain the confidence of both the distributors and investors.

On the retail side, he said Nippon has been holding fort despite all the trouble with the previous owners. Of late, Nippon has added about one lakh systematic învestment plan a month, though there has been a slowdown in SIP addition by the entire industry.

In the coming year, Sikka believes that Nippon will gain lost ground on the institutional side and make inroads into smaller towns to attract more învestment from retail investors, though the industry may witness one or two months of slowdown on inflows.

Published on December 18, 2019
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