Indian banks parking their excess money in liquid schemes of mutual funds (MFs) led to the rise of the assets under management (AUM) of the Indian MF industry in July, as it grew by 22%. The AUM of the MF industry in July stood at Rs 4,86,513.71 crore, up by Rs 86,180.72 crore or 21.53% from the previous month. The AUM of June was at Rs 4,00,332.99 crore.
R Rajagopal, CIO, DBS Chola Asset Management Company (AMC), said, “Banks and corporates parking their excess working capital in liquid schemes of MFs, is the primary reason why the AUM of the industry grew by almost 22% in July.”
But now since the Reserve Bank of India (RBI) has removed the cap of Rs 3,000 crore on reverse repo, experts opine that a good portion of this amount parked in liquid schemes will move out of MFs and go back to the banking system.
Sameer Kamdar, country head-MF, Mata Securities, said, “With the cap of Rs 3,000 crore removed it is expected that call rates will revert back to their normal levels of around 6% (reverse repo rate). The short-term plans (STPs) will also become attractive as the money market yields are expected to stabilise”.
Meanwhile in terms of AUM, Reliance AMC retained its top position, with its AUM at Rs 66,420.03 crore a rise of Rs 6,563 crore or up 10.96%. ICICI Prudential AMC was at second position with AUM of Rs 48,688.56 crore, an increase of Rs 5,074.80 crore or up 11.64%. The AUM of UTI AMC grew by 9.01% or Rs 3,515.73 crore to Rs 42,547.61 crore in July and Franklin Templeton AMC AUM soared up by 21.70% to Rs 32,213.84 crore.