HDFC AMC: A stock from a sunrise sector

K. ARAVIND

HDFC AMC, India’s largest asset management company, manages assets worth Rs.3.6 lakh crore. The company was started in 1999 as a joint venture between Housing Development Finance Corporation Limited and Standard Life Investment Limited.

HDFC AMC has over 93 lakh accounts, including those of small investors and investment firms. HDFC AMC has the largest market share among the actively managed equity funds. The company claims that one in four mutual fund investors in India invests in HDFC AMC.

The company also provides services to high net worth investors, corporates, trusts, provident funds and portfolio management for domestic and foreign institutions. The company currently has 75,000 empaneled distributors and 211 branches in more than 200 cities.

New growth areas in business are referred to as the `Sunrise Sector ‘. Asset management is one such area. Mutual funds are the biggest beneficiaries of the growing investment in the stock market. Asset management companies are achieving excellent asset growth.

At present, only 3% of the population in India invests in mutual funds. The past few years have seen an increase in the number of investors flocking to mutual funds. It is hoped that more investors will enter the sector realising the potential of mutual funds. This opens up great opportunities for asset management companies. As the number one company in the sector, HDFC AMC can take advantage of these opportunities more effectively.

During the April-June quarter of the current financial year, HDFC AMC performed well. The company had posted a net profit of Rs 302 crore for the quarter. Profit growth was 3% over the same period last year. During the same period last fiscal the profit was Rs.292 crore