Reliance Mutual Fund Beats Demonetisation Blues; AUM Up 25%
Reliance MF also said that the plans to list the Housing Finance business were on track.
Beating demonetisation blues, financial services major Reliance Capital Ltd. saw its mutual fund business register 25 percent surge in assets under management to Rs 1.95 lakh crore in the third quarter of the current fiscal and said that it is on track to list its home finance unit by April.
Reliance Mutual Fund also registered an 8 percent growth in profit to Rs 151 crore with a 10 percent increase in the total number of SIPs (Systematic Investment Plans) during the October-December quarter of 2016-17.
Reliance Capital said that notwithstanding the slowdown in business that followed immediately after the demonetisation announcement by the government, the company has been able to register growth across all its businesses.
All our businesses have shown positive growth despite the government announcing demonetisation and its consequential impact on markets and business in the quarter.
While our mutual fund business gained from demonetisation and registered a 25 percent growth in AUM, our general insurance, broking and distribution have shown surge in profits during the quarter. Demonetisation did not have any impact on both our lending businesses that showed growth during the quarter.Sam Ghosh, MD and CEO, Reliance Capital
Reliance Home Finance, which recently raised over Rs 3,000 crore from investors by way of NCDs issue, registered a profit of Rs 35 crore while the commercial finance business, which focuses on SME lending, registered a profit of Rs 80 crore during the quarter.
“We had announced listing of its Housing Finance Business wherein Reliance Capital would retain 51 percent shareholding and the 49 percent stake would be offered to existing investors by offering one free share of RHF for every one share held in Reliance Capital. We propose to complete this exercise by April 2017,” Ghosh said.
He also said the company’s plans to demerge its commercial finance business into a separate subsidiary were on track and would be completed this fiscal.
“Our plans to demerge commercial finance business and convert Reliance Capital into a Core Investment Company are on track. We propose to complete this demerger and conversion by the end of current fiscal,” Ghosh said.
Reliance Capital saw a turnaround in its general insurance business while the broking and distribution business also registered a significant jump in its profit to Rs 14 crore during this quarter.
Regarding mutual funds, the company said it will continue to focus on increasing participation from beyond top 15 cities with a healthy increase in SIPs, that registered a 10 percent increase to 16 lakh during the quarter.
It further said there was no impact of demonetisation on the two lending businesses like commercial finance and housing finance as they continued to register healthy growth with no increase in NPAs.
Home finance registered a profit of Rs 35 crore while commercial finance registered profit of Rs 80 crore during the quarter.
