HDFC AMC reported a 42% increase in net profit, driven by an increase in assets under management. Its net profit for the June quarter rose to ?291.79 crore, as compared to ?205.26 in the same quarter of the previous year. Its total income increased to ?552.75 crore as compared by ?501.19 crore in the year-earlier quarter. The AMC is the largest actively managed equity-oriented mutual fund manager in the country.
AUM or assets under management rose 18% to ?3,56,700 crore, a year on year increase of 18%. AUM in actively managed equity oriented funds i.e. equity oriented total AUM excluding arbitrage funds and index funds grew to ?1,68,900 crore as on June 30, 2019 with a market share of 16.2%.
During the quarter, HDFC AMC decided to provide liquidity arrangement to certain Fixed Maturity Plans (FMPs) of HDFC Mutual Fund, to deal with the illiquidity faced by such FMPs due to their exposure to certain Non Convertible Debentures (NCDs). The liquidity arrangement entailed acquisition of such NCDs by the company from these FMPs. Consequently, during the quarter, the company has purchased such NCDs amounting to ?426.45 crore at the prevailing valuation yields/prices provided by independent rating agencies.
These NCDs are secured by a pledge of certain listed equity shares. These NCDs are classified as financial assets at fair value through profit and loss and have been appropriately valued at quarter end. Subsequently, under the same arrangement, the Company has additionally purchased NCDs amounting to ?33.26 Crore on July 01 , 2019.
HDFC AMC shares were trading 1.6% higher at ?1,966 in late trade.