Mutual Funds
Companies increasing investment in their own mutual funds

Birla Sun Life MF has over 8% of its assets under management or AUM from investments by group companies followed by HDFC MF at 5%, ICICI Prudential MF at 4.8%, UTI MF at 3.8% and Reliance MF at 3.7%

Leading fund houses have seen a considerable increase in investments in their schemes by their group companies during April-May 2014.


HDFC Mutual Fund (MF), the largest fund house in the country, witnessed 17% rise in investment in its schemes to Rs6,462 crore by group companies during May.


HDFC Mutual Fund was followed by ICICI Prudential MF (16%), Birla Sun Life MF (13%) and Reliance MF (12%).


However, UTI MF saw a drop of 2% in investment in its schemes to Rs3,069 crore by related companies during the first two months of FY15.


Moreover, in April, the top five fund houses saw an increase in investments in the range of 13% and 60%.


In absolute terms, Birla Sun Life MF saw an investment of Rs8,072 crore from its related entities in May, ICICI MF (Rs5,749 crore) and Reliance MF (Rs4,118 crore) were the next two.


Overall, Birla Sun Life MF has over 8% of its assets under management (AUM) from investments by group companies, followed by HDFC MF (5%), ICICI Prudential MF (4.8%) UTI MF (3.8%) and Reliance MF (3.7%).


The fund houses have been disclosing the exact amount of investments by their group companies in their respective schemes following the directive from market regulator Securities and Exchange Board of India (SEBI).


As per SEBI's direction, MFs are required to make monthly disclosure of AUM from different categories of schemes, AUM from places beyond top-15 cities, contribution of sponsor and its associates in AUM, and contribution from different types of investors like retail or corporate.


The fund houses also need to make disclosures about state-wise contribution and AUM from sponsor group or non-sponsor group distributors on their websites and share the same with AMFI within seven working days from end of the month. These rules came into effect from this month onwards.


The norms were recently framed by the market regulator as part of its first-ever long-term policy for the mutual fund industry.



Sankar Amburkar

3 years ago

What does this mean to the retail investor? Does it signify the confidence the group is having on the mutual funds or pushing more money to a venture for revivial?


3 years ago

By the AMCs, of the AMCs, for the AMCs . . .

Supreme court vacates stay on Jayalalithaa's trial

Tamil Nadu Chief Minister, Jayalalithaa faces charges of accumulation of over Rs66 crore worth of assets disproportionate to her known sources of income

The Supreme Court on Tuesday vacated the stay on trial proceedings against Tamil Nadu Chief Minister J Jayalalithaa in the disproportionate assets case against her.


A Bench of Justices Vikramajit Sen and SK Singh also dismissed Jayalalithaa’s petition for staying her trial till the lower court decides the plea of a company, alleging that some of the properties shown as part of the disproportionate assets of the Tamil Nadu chief minister, actually belonged to them.


The apex court recalled its earlier order by which the trial against her was stayed.


The disproportionate assets case was shifted to Bangalore in 2003 following a Supreme Court directive on a petition alleging that a fair trial was not possible in Chennai during her tenure as Chief Minister then.


Jayalalithaa faces charges of accumulation of over Rs66 crore worth of assets disproportionate to her known sources of income.


Besides Jayalalithaa, VK Sasikala, VN Sudhakaran and J Illavarasi are also facing trial in the case.


The Chief Minister had sought a stay on the trial till the lower court decides the plea of Lex Property Development (P) Ltd, a Chennai-based company.


The company had claimed that the properties, which have been attached by the authorities as ‘benami’ holdings of Jayalalithaa, in fact, belonged to it and said this plea be decided first before the lower court proceeds with the trial in the assets case.


The court had allowed the company, which has separately challenged the attachment of properties, to cross examine the witnesses.


Cipla pays $14 million to buy 60% stake in Sri Lankan distributor

Cipla bought majority stake in a new distribution company from Sri Lanka to markets its products in that country

Pharmaceutical company Cipla Ltd, on Tuesday, said it bought 60% stake in a new company in Sri Lanka for $14 million (nearly Rs85 crore) to market its products in that country.


Cipla (Mauritius) Ltd, a wholly owned subsidiary of the Indian company, signed a definitive agreement with its existing Sri Lankan distributor for acquisition of 60% stake in a new company, Cipla said in a regulatory filing. “The new company will market Cipla’s products in Sri Lanka”, it added.


“The consideration payable for the transaction is $14 million,” the filing said, adding that the proposed acquisition was subject to regulatory approvals.


As part of its global expansion, Cipla has been actively acquiring companies.


Last year, it completed the buyout of South African pharma firm Cipla Medpro for Rs2,707 crore. Cipla had also acquired Croatia-based firm Celeris, distributor of its products in that country last December.


Cipla closed Tuesday marginally down at Rs412.8 on the BSE, while the 30-share Sensex ended the day 1.3% higher at 25,521.


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