Mutual funds lose Rs36,000 crore of assets in FY12

Among the top-five fund houses, HDFC MF, Birla Sunlife MF and UTI MF managed to improve their average AUMs in the last quarter

Hit by a downtrend for the third consecutive quarter, the mutual fund industry saw its total asset base shrink by about 5% or Rs36,000 crore in the just-ended fiscal year 2011-12.

Reaching its lowest level in more than two years, the average asset under management (AUM) of the entire Indian mutual fund industry dipped to Rs6,64,824 crore at the close of the last fiscal, ended 31 March 2012.

The decline of 5% in the last fiscal followed a decline of 11% in the previous fiscal 2010-11, when the total average AUM had dipped to near Rs7 lakh crore.

As per the data compiled by the industry body, the Association of Mutual Funds in India (AMFI), HDFC Mutual Fund retained its pole position as the country's biggest MF with an average AUM of Rs89,879 crore, followed by Reliance MF (Rs78,112 crore), ICICI Prudential MF (Rs68,718 crore), Birla Sunlife MF (Rs61,143 crore) and UTI MF (Rs58,922 crore).

While HDFC MF is the country's biggest mutual fund, Reliance Capital Asset Management Co (RCAM) is the largest and most profitable AMC in India, with total AUM of  Rs1,40,000 crore after taking into account MFs, government-sponsored public funds, managed accounts and hedge funds.

During the fiscal year 2011-12, the total number of retail folios or the number of investor accounts across all the 44 fund houses also declined by around 15 lakh.
Their total asset size has declined to a level last seen in July 2010, while it has dropped nearly 17% from the all-time record high of Rs8 lakh crore in May 2010.

Out of this, the total size of the industry has declined by around 11% in the past three quarters alone, while the dip during the last quarter (January-March 2012) was about 2.5% or Rs16,884 crore.

Among the top-five fund houses, HDFC MF, Birla Sunlife MF and UTI MF managed to improve their average AUMs in the last quarter, while that of Reliance MF and ICICI Pru MF declined.

Others whose average AUM declined during the last quarter included Franklin Templeton, DSP BlackRock, Kotak Mahindra, IDFC, Tata, Sundaram, Deutsche, Religare, Fidelity, JP Morgan, LIC, IDBI, HSBC, BNP Paribas, Goldman Sachs, Baroda Pioneer, L&T, Peerless, Taurus, Morgan Stanley, Pramerica, ING Vysya, Daiwa, AIG Global, Edelweiss and Bharti AXA Mutual Funds.

A total of 30 fund houses witnessed a decline in their average AUMs during the last quarter, while it increased for 14 others, which included SBI, Axis, Canara Robecco, Principal, Indiabulls, Union KBC, Sahara, Mirae Asset, Motilal Oswal, Escorts, Quantum and IIFL Mutual Funds.

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Renault launches diesel Fluence priced at Rs15.2 lakh

The new Fluence will be powered by 1.5 litre diesel engine, which will give a mileage of 20.4 kilometre per litre

Car maker Renault India launched a new diesel variant of its premium sedan 'Fluence' in the country, priced at Rs15.2 lakh (ex-showroom, Delhi).

"Fluence was the first offering from Renault in India. The new upgraded variant is about our commitment to the Indian market and is a result of the feedback we received from our customers," Renault India managing director Marc Nassif said.

The new Fluence will be powered by 1.5 litre diesel engine, which will give a mileage of 20.4 kilometre per litre, he added.

It will compete with the likes of Volkswagen Jetta, Skoda Laura and Toyota Corolla Diesel, which are priced between Rs15.22 lakh and Rs16.41 lakh.

The company had launched the Fluence in May 2011 and it was followed by two more cars -- sports utility vehicle Koleos and premium compact car Pulse.

"We had announced plans to roll out five products by the end of 2012. The next in line is our crossover Duster, which will be launched before Diwali, and it will be followed by one more product," Nassif said, adding all the products will be assembled at its facility in Chennai.

He said the company is targeting to sell a total of 30,000 cars in India this year compared to about 1,500 units in 2011.

To push up its sales, the company is also expanding its dealership network to 100 by 2012 from 43 at present.

When asked about reports that Renault India is looking to set up a new facility in Gujarat, Nassif said: "When we will saturate the 4 lakh annual capacity at the current facility, we will look at expansion. We are open to choosing any location, but when and where, only time will tell."

Talking about Renault-Nissan's ultra-low-cost car project with Bajaj Auto, he said Renault India's hands are full with its existing priorities in the country.

"This project is being taken care of by the alliance at the global level and we (Renault India) are not at all concerned about it. Any decision will be announced by the alliance," he added.

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Companies need RBI nod to operate foreign currency accounts abroad

“An Indian party is required to obtain prior permission of the Reserve Bank to open, hold and maintain FCA in a foreign country for the purpose of overseas direct investments in that country...” the RBI said in a notification

The Reserve Bank of India said Indian companies would need to obtain its prior permission to open, hold and maintain foreign currency account (FCA) abroad for the purpose of overseas direct investments.

"An Indian party is required to obtain prior permission of the Reserve Bank to open, hold and maintain foreign currency account (FCA) in a foreign country for the purpose of overseas direct investments in that country..." the RBI said in a notification.

"The host country regulations stipulate that the investments into the country is required to be routed through a designated account," it said, adding that the FCA should be opened, held and maintained as per the regulation of the host country.

Last week, the RBI had relaxed various norms on overseas direct investments to offer more flexibility to the Indian companies as well as individuals.

It added that the remittances sent to the FCA by the Indian company should be utilised only for making overseas direct investment into the joint venture (JV) or wholly-owned subsidiaries (WOS) abroad.

"Any amount received in the account by way of dividend and or other entitlements from the subsidiary shall be repatriated to India within 30 days from the date of credit," it added.

The Indian company, it said, should submit the details of debits and credits in the FCA on yearly basis to the designated bank with a certificate from the statutory auditors, certifying that the FCA was maintained as per the host country laws and extant FEMA regulations as applicable.

"The FCA so opened shall also be closed immediately or within 30 days from the date of disinvestment from JV or WOS or cessation thereof," it added.

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