Recently-listed ICICI Prudential Asset Management Company Wednesday reported strong double-digit on-year growth in its net profit and revenue for the December quarter.
Its industry peer HDFC AMC, too, reported double-digit growth in these key earnings parameters, but were slower than that of ICICI Prudential. Sequentially, these companies posted mid-to-high single digit increase in the two metrics.
The quarterly average asset under management of ICICI Prudential was up over 22% on year, faster than the 17% rise HDFC AMC has posted for the reporting quarter as well as the mutual fund industry’s 18% growth. ICICI Prudential also announced an interim dividend of ₹14.85 per share.
As of December, ICICI Prudential has the highest market share of 13.5% while HDFC Asset Management Company holds 11.5%. In equity-oriented schemes, HDFC AMC has 13% market share while the the other peer has over 26%.
ICICI Prudential Media Call
The ICICI Bank-Prudential Plc joint venture entity said it is in the process of raising money for an inbound fund out of its GIFT City branch and expects to scale it up over a period of time.
In a post-earnings media call on Wednesday, the management said that the opportunity in GIFT City is twofold; one is with respect to non-resident Indians investing in the country and the other is the outward investments from here.
The company also said that it has grown in line with the mutual fund industry. “It will be our endeavor that we focus on our growth in line with the industry,” it said. The industry’s quarterly asset under management has grown over 18% on year in the December quarter, while that of the company’s
Upcoming NFO Launches
Speaking about its upcoming specialized investment funds, the company said that it will look at these products’ performance in the next 2-3 years and then will see how the whole category pans out. The company has two upcoming new fund offers; one with 100 mid-cap and small-cap companies and the second one will be a hybrid long-short fund.
The recent cut in mutual fund expense ratios by the market regulator, the company said large-size funds will have a bigger impact than smaller-size funds. “We are looking to see how all of this would work out and how we can rationalize the impact,” the management said.
Last month, the Securities and Exchange Board of India had reduced the base expense ratio limit for many categories, including index funds and exchange traded funds, by 10-15 basis points. The regulator had also trimmed the limits on brokerage paid by asset management companies, which now excludes statutory levies.
After market hours Wednesday, the Mumbai-based entity reported a 45% on-year growth in its December quarter net profit to ₹75.3 crores and almost 24% rise in its revenue to ₹1,515 crores. This is the company’s first earnings post its listing in December. The stock price is up around 5% since its debut and closed over 2% higher at ₹2,729 ahead of the results.