Analyst Concall
HDFC AMC to wait for final guidelines on new asset class
This story was originally published at 20:10 IST on 14 January 2025
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--HDFC AMC: Continue to strengthen position in B-30 market
--HDFC AMC: Aim to launch 2 new pdts in Jan-Mar from GIFT City branch
--HDFC AMC: Need to look at gross flows while looking at SIP data
--HDFC AMC: Market share remains healthy across all distribution channels
--HDFC AMC: Waiting for final set of regulations on new asset class norms
--HDFC AMC:Not necessary complex products under new asset class will succeed
--HDFC AMC: Team working hard to increase distribution channel via HDFC Bank
--HDFC AMC:Direct channel has grown largely due to fintechs, invest advisors
MUMBAI – HDFC Asset Management Co. Ltd. on Tuesday said it is in wait-and-watch mode before launching products in the new asset class introduced by the Securities and Exchange Board of India. "We will have products in this space as and when we get the final set of regulations," the fund house's management said in a post-earnings conference call with analysts.
"Our team is working on creating the right set of products which will help us gain share in this phase. Not necessary that only highly complex products will succeed when it comes to this category," the management said.
SEBI introduced a new asset class called specialised investment fund in December to bridge the gap between mutual funds and portfolio management services. As per a SEBI release, the minimum investment limit for the new product will be INR 1 million per investor across all investment strategies of the new product in a particular asset management company.
In the analyst call, the company also said it aims to launch two new products in Jan-Mar from its branch in Gujarat International Finance Tec-City. "Three of our funds are now live in our GIFT subsidiary, with AUM (assets under management) exceeding $150 million," the management said. "We aim to have two new products going live this quarter."
On the business front, the asset management company said, "We continue to strengthen our position as the second-largest player in B30 (beyond the Top 30) markets with 12% market share of monthly average AUM in December. To further expand our presence in these cities, we opened 25 new offices, largely in B30 cities." The fund house also said the activity through its direct channel has grown on account of financial technology companies and registered investment advisers. As of Dec. 31, distribution through the direct channel accounted for 41.4% of the total assets under management, compared with 38.8% a year ago.
The company said its market share remains healthy across all distribution channels. HDFC Asset Management Co. also said there is huge potential to develop the distribution channel through HDFC Bank. "The team is working harder than ever to take the distribution partnership with the bank to the next level," the management said. As of Dec. 31, 5.7% of the company's total assets under management came through the HDFC Bank distribution channel, as against 6% a year ago.
The fund house, whose assets under management for systematic investment plans, which includes a systematic transfer plan, stood at INR 1.78 trillion as of Dec. 31, said it is important to look at gross flows while looking at systematic investment plan data. For December, the mutual fund industry saw systematic investment plan transaction flows amounting to INR 265 billion. The industry's assets under management through the systematic investment plan mode stood at INR 13.6 trillion as of Dec. 31. In December, HDFC Asset Management Co. processed 11 million systematic investment plan transactions amounting to INR 38.2 billion.
HDFC Asset Management Co.'s net profit for Oct-Dec rose 31% on year to INR 6.41 billion. Reacting to the earnings, shares of the company Tuesday closed 0.8% higher at INR 3,865.05 on the National Stock Exchange. End
Reported by Ashna Mariam George
Edited by Rajeev Pai
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