HDFC MF piped ICICI Prudential MF to grab the top position in India
Suppressing ICICI Prudential Mutual Fund, HDFC Mutual Fund has become the largest asset management company in India after a gap of more than 2 years. According to the latest AMFI (Association of Mutual Funds in India) data, by the end of December, while HDFC MF has Rs.3.35 lakh crore AUM (Asset under management), ICICI Prudential MF has only Rs.3.08 lakh crore under its management. Compared to the last quarter, the AUM of HDFC MF has increased by 9% in the 3-month period between October-December. On the contrary, the AUM of ICIC Prudential MF has come down by 0.6% during the given period. Earlier, HDFC MF was the largest asset management company in the country till October 2011 and till March 2016 it was the market leader. However, ICICI Prudential MF had slowly overtaken it in terms of AUM on a month-on-month basis and finally reached the top position in 2016.
22 January 2019
Mutual Fund Investment Becomes All the Rage Among Indians
The share of equity investments in the country of India has increased substantially and has skyrocketed tremendously ever since the rise in mutual fund investment.
While the area of investment might have remained same as compared to the preceding years, the way (technique) of investing has undergone change and modification. Almost about a decade before the current century, the preferred route of investment was equity investment. The financial year 2018 saw multiple retail investors taking the Systematic Investment Plan (SIP) route.
The direct retail holding in the BSE 500 index stocks dropped significantly to 11.7%.
11 January 2019
Founder of Jet Airways may lose majority stake if its restructuring plan is implemented
The State Bank of India (SBI)-led consortium of lenders wants the founder and chairman of Jet Airways, Mr. Naresh Goyal to step down from its board and give away the majority control. The airlines, is at the moment experiencing distress and as a part of the resolution plan, banks want the management to change. Hence, at a recent meeting between representatives of lenders, Etihad Airways, and Jet Airways, Mr. Goyal was asked to give up his board membership as well as the majority control. Some sources have revealed that the son of Mr. Naresh Goyal, Mr. Nivaan Goyal is being considered as a potential replacement of his father on the board.
The recent meeting was held at the headquarters of Jet Airways which is Mumbai and was chaired by SBI. A representative of Etihad Airways also attended the meeting. Etihad Airways holds a 24% stake in Jet Airways. During the meeting, it was clarified to Jet Airways by SBI that it will not offer any fresh loans until the forensic reports of the companyâ€™s books are revealed by Ernst & Young (EnY) who, at the moment, is preparing the reports. Jet Airways has an outstanding loan with SBI of more than Rs.8,000 crore.
10 January 2019
IOC Expected to Purchase 30 Crore Shares Back
A huge buyback of shares has recently been announced by Indian Oil Corporation and they are planning to purchase over 29.76 crore shares. It further planned to offer an interim dividend at the rate of 6.75 only. The decisions taken by IOC is going to benefit the Indian Government and more than 4 lakh investors, on an individual level.
The regulatory filing rules and regulations states â€˜Buyback of equity shares of the company not exceeding 29,76,51,006 equity shares being approximately 3.06 per cent of the total paid-up equity share capital of the company at a price of ?149 per equity share payable in cash for an aggregate consideration not exceeding ?4,435 croreâ€™. Almost all of the equity investors of the aforementioned company as of the mentioned date, will be permitted to conduct trade of tender shares on a highly proportionate basis.
The company also further said that â€˜The public announcement setting out the process, timelines and other requisite details will be released in due course in accordance with the buyback regulationsâ€™. The price of the buyback stands at an 8.6% premium to the closing price of the stocks, as of Friday on the standing BSE. The Indian Government is said to have been targeting a minimum amount of Rs.5,000 crore through the means of share buyback offers of multiple Central Public Sector Undertakings, like BHEL, Coal India, NALCO, NLC, and so on.
21 December 2018
New mutual fund scheme launched by DSP Mutual Fund
Asset management firm, DSP Mutual Fund has launched a new scheme that would follow the theme of healthcare and pharma. The scheme, known as DSP Healthcare Fund is an open-ended scheme that will make investments predominantly in equity and its related securities of firms dealing in healthcare and pharmaceuticals. A small portion of the investments will also be allocated to foreign securities. The New Fund Offer (NFO) will be open for subscription from 12 November to 26 November 2018.
The DSP Healthcare Fund is likely to invest up to 25% in stocks of international healthcare, particularly in the stocks of major US firms. The scheme will be benchmarked to the S&P BSE Healthcare Index and will be managed by Mr. Vinit Sambre and Mr. Aditya Khemka. For overseas investments, the fund manager would be Mr. Jay Kothari. There will be no entry load charged to investors but an exit load of 1% would apply if investors exit the scheme before 12 months from unit allotment date.
14 November 2018
SBIâ€™s Revamped Gold Deposit Scheme - 3 things you should know
This festive season, you can consider investing in SBIâ€™s Revamped Gold Deposit Scheme (R-GDS). The scheme works like a fixed deposit in gold and helps investors earn interest on the gold investments. Here are some things you need to know about the scheme:
â€¢ The motive of the scheme is to ensure that idle gold is mobilised in the country and is put to productive use. Customers get a chance to earn income in the form of interest on the idle gold holdings.
â€¢ Individuals, partnership firms, hindu undivided families (HUFs), and trusts (including mutual funds) can invest in the scheme.
â€¢ A minimum of 30 grams of gold (gross weight) needs to be invested. There is, however, no maximum limit on the investment.
12 November 2018
NAVs of debt mutual fund schemes witness a dip in the wake of IL&FS crisis
The distress in the NBFC (Non-Banking Financial Company) segment and the defaulting of the IL&FS (Infrastructure Leasing & Financial Services) seem to be creating panic in the debt mutual fund space. 2 debt funds of Tata Mutual Fund recently saw a dip in its Net Asset Value (NAV). Both the funds held papers of IL&FS and this has been the reason for further anxiety among investors. A dip of 5.94% in the NAV was witnessed by the Tata Money Market Fund on 29 October 2019 while there was a dip of 3.2% in the NAV of the Tata Short Term Fund.
The reason behind the decline in the NAVs of the schemes of Tata Mutual Fund was the writing off the balance of 50% of its investment in the commercial papers (CPs) issued by IL&FS post the failure of the infrastructure firm in making the maturity proceed payments. 29 October 2018 was the day when the CPs were supposed to mature. Fund experts however suggest that investors need not worry about the dip in the NAVs as it will eventually fetch good returns over the long term.
9 November 2018
AMFI urges SEBI to allow side pocketing for IL&FS issued bonds
The Association of Mutual Funds in India (AMFI) has urged the Securities Exchange Board of India (SEBI) to permit funds that have an exposure to bonds issued by the Infrastructure Leasing & Financial Services (IL&FS) to use side pocketing. Mostly used by developed markets, side pocketing is used to cushion investors, particularly the smaller ones from being impacted by large investors suddenly exiting from exposed funds. The process of side pocketing involves the creation of 2 funds - one holding only the bad papers and another one that holds only the good ones.
Side pocketing segregates default papers from perfectly liquid papers to create the above-mentioned funds and even though the SEBI is considering AMFIâ€™s proposal, it is concerned about the moral hazards associated with the process. The mutual fund industry was holding papers worth Rs.2,700 crore in a time when the IL&FS had defaulted for the first time. Developed countries that have well-established debt markets, alternative investment vehicles and hedge funds use side pocketing but this is the first time that the mutual fund industry in India is planning to use it.
7 November 2018
Reliance Mutual Funds get ESIC mandate to manage funds
Reliance Nippon Life Assets Management recently stated that Reliance Mutual Fund, the assets management arm of Reliance Capital, has won the mandate from the Employeesâ€™ State Insurance Corporation (ESIC) to manage its funds. The funds were worth Rs.59,400 crore by the end of the last fiscal year.
Reliance Mutual Fund had locked horns against the HDFC Mutual Fund, UTI Mutual Fund, and HSBC Mutual Fund and claimed the managing responsibility for the ESIC funds. At present, Reliance Mutual Fund is also responsible for the management of the funds of the Employeesâ€™ Provident Fund Organisation (EPFO), The Pension Fund Regulatory and Development Authority (PFRDA), and The Coal Mines Provident Fund Organisation (SMPFO). Sundeep Sikka, the ED and CEO of Reliance Mutual Funds said that the mandate reconfirmed that the company had a strong investment process and a consistent track record of delivering returns. At present, Reliance Mutual Funds manages total assets of around Rs.4.1 lakh crore. The total number of investor folios as of June 2018 was 83 lakh.
30 October 2018
Financers in India to repay Rs.1.2 trillion of commercial papers due to mutual funds
The non-banking financial companies in India face a heavy challenge as they need to repay around Rs.1.2 trillion of commercial papers by the end of 2018. As per data collected by the Securities and Exchange Board of India (SEBI), this will near a record of Rs.1.46 trillion of commercial papers between August and October. This happened due to the fallout of the IL&FS (Infrastructure Leasing & Financial Services Ltd.) group which was responsible for financing some of the major infrastructure projects in India. Financers would find it tough as they depend on the debt issued to Indiaâ€™s money market funds for short-term financing.
The money market funds that were quite popular over the low-yielding savings accounts suffered worst withdrawals with the issue with the IL&FS. Financing costs have also increased among the credit markets which means this debt will cost more. Mr A.M. Karthik, the sector head at ICRA stated that non-banking financial companies may need to turn to un-utilised bank facilities in order to pay some of the maturing commercial papers. He also stated that the important thing is whether banks would these financiers to make timely drawdowns on such facilities. On a positive note, the central bank has alleviated some rules so that these financers can avail loans more easily.
29 October 2018
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