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INDUSTRY PROFILE

Mutual Funds have been a significant source of investment in both government and corporate
securities. It has been for the decades the monopoly of the state with UTI being the key
player with invested funds exceeding Rs. 300 bn. (US $ 10 bn.). The state owned insurance
companies also hold a portfolio of stocks. Presently, numerous mutual funds exist, including
private and foreign companies. Banks - mainly state owned too have established Mutual
Funds (MFs). Foreign participation in mutual funds and asset management companies
permitted on a case-by-case basis.

Structure of the Indian mutual fund industry

The Indian mutual fund industry is dominated by the Unit Trust of India, which has a total
corpus of Rs700bn collected from more than 20 million investors. The UTI has many
funds/schemes in all categories i.e. equity, balanced, income etc with some being open-ended
and some being closed-ended. The Unit Scheme 1964 commonly referred to as US 64, which
is a balanced fund, is the biggest scheme with a corpus of about Rs200bn. Most of its
investors believe that the UTI is government owned and controlled, which, while legally
incorrect, is true for all practical purposes.

The second largest category of mutual funds is the ones floated by nationalized banks. Can
bank Asset Management floated by Canara Bank and SBI Funds Management floated by the
State Bank of India are the largest of these. GIC AMC floated by General Insurance
Corporation and Jeevan Bima Sahayog AMC floated by the LIC are some of the other
prominent ones.

Some of the AMCs operating currently are:

Name of the AMC Nature of ownership

Alliance Capital Asset Management (I) Private Limited Private foreign
Birla Sun Life Asset Management Company Limited Private Indian
Bank of Baroda Asset Management Company Limited Banks
Bank of India Asset Management Company Limited Banks
Can bank Investment Management Services Limited Banks
Cholamandalam Cazenove Asset Management Company Limited Private foreign
Dundee Asset Management Company Limited Private foreign
DSP Merrill Lynch Asset Management Company Limited Private foreign

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 Escorts Asset Management Limited Private Indian
First India Asset Management Limited Private Indian
GIC Asset Management Company Limited Institutions
IDBI Investment Management Company Limited Institutions
Indfund Management Limited Banks
ING Investment Asset Management Company Private Limited Private foreign
J M Capital Management Limited Private Indian
Jardine Fleming (I) Asset Management Limited Private foreign
Kotak Mahindra Asset Management Company Limited Private Indian
Kothari Pioneer Asset Management Company Limited Private Indian
Jeevan Bima Sahayog Asset Management Company Limited Institutions
Morgan Stanley Asset Management Company Private Limited Private foreign
Punjab National Bank Asset Management Company Limited Banks
Reliance Capital Asset Management Company Limited Private Indian
State Bank of India Funds Management Limited Banks
Shriram Asset Management Company Limited Private Indian
Sun F and C Asset Management (I) Private Limited Private foreign
Sundaram Newton Asset Management Company Limited Private foreign
Tata Asset Management Company Limited Private Indian
Credit Capital Asset Management Company Limited Private Indian
Templeton Asset Management (India) Private Limited Private foreign
Unit Trust of India Institutions
Zurich Asset Management Company (I) Limited Private foreign

Recent trends in mutual fund industry

The most important trend in the mutual fund industry is the aggressive expansion of the
foreign owned mutual fund companies and the decline of the companies floated by
nationalized banks and smaller private sector players.

Many nationalized banks got into the mutual fund business in the early nineties and got off to
a good start due to the stock market boom prevailing then. These banks did not really
understand the mutual fund business and they just viewed it as another kind of banking
activity. Few hired specialized staff and generally chose to transfer staff from the parent
organizations. The performance of most of the schemes floated by these funds was not good.
Some schemes had offered guaranteed returns and their parent organizations had to bail out
these AMCs by paying large amounts of money as the difference between the guaranteed and
actual returns. The service levels were also very bad. Most of these AMCs have not been able

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to retain staff, float new schemes etc. and it is doubtful whether, barring a few exceptions,
they have serious plans of continuing the activity in a major way.

The experience of some of the AMCs floated by private sector Indian companies was also
very similar. They quickly realized that the AMC business is a business, which makes money
in the long term and requires deep-pocketed support in the intermediate years. Some have
sold out to foreign owned companies, some have merged with others and there is general
restructuring going on.

They can be credited with introducing many new practices such as new product innovation,
sharp improvement in service standards and disclosure, usage of technology, broker
education and support etc. In fact, they have forced the industry to upgrade itself and service
levels of organizations like UTI have improved dramatically in the last few years in response
to the competition provided by these.

Performance of Mutual Funds in India

Let us start the discussion of the performance of mutual funds in India from the day the
concept of mutual fund took birth in India. The year was 1963. Unit Trust of India invited
investors or rather to those who believed in savings, to park their money in UTI Mutual Fund.
The performance of mutual funds in India in the initial phase was not even closer to
satisfactory level. People rarely understood, and of course investing was out of question. But
yes, some 24 million shareholders were accustomed with guaranteed high returns by the
beginning of liberalization of the industry in 1992. This good record of UTI became
marketing tool for new entrants. The expectations of investors touched the sky in profitability
factor. However, people were miles away from the preparedness of risks factor after the
liberalization.

Market Trends

COMPARISION OF MUTUAL FUNDS WITH OTHER INSTRUMENT

A lone UTI with just one scheme in 1964 now competes with as many as 400 odd products
and 34 players in the market. In spite of the stiff competition and losing market share, Last
six years have been the most turbulent as well as exiting ones for the industry. New players

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have come in, while others have decided to close shop by either selling off or merging with
others. Product innovation is now passé with the game shifting to performance delivery in
fund management as well as service. Those directly associated with the fund management
industry like distributors, registrars and transfer agents, and even the regulators have become
more mature and responsible.

The industry is also having a profound impact on financial markets. While UTI has always
been a dominant player on the bourses as well as the debt markets, the new generations of
private funds, which have gained substantial mass, are now flexing their muscles. Fund
managers, by their selection criteria for stocks have forced corporate governance on the
industry. Rewarding honest and transparent management with higher valuations has created a
system of risk-reward created where the corporate sector is more transparent then before.

Funds have shifted their focus to the recession free sectors like pharmaceuticals, FMCG and
technology sector. Funds performances are improving. Funds collection, which averaged at
less than Rs100bn per annum over five-year period spanning 1993-98 doubled to Rs210bn in
1998-99. In the current year mobilization till now have exceeded Rs300bn. Total collection
for the current financial year ending March 2000 is expected to reach Rs450bn.

What is particularly noteworthy is that bulk of the mobilization has been by the private sector
mutual funds rather than public sector mutual funds. Indeed private MFs saw a net inflow of
Rs. 7819.34 Crore during the first nine months of the year as against a net inflow of
Rs.604.40 Crore in the case of public sector funds

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 COMPANY’S PROFILE

VISION & MISSION

VISION

To be a prominent destination to enhance the Prosperity of its Clients, Investors, Associates

and Employees, ALLways.

MISSION
To provide best value for money to clients through personalised service, innovative products,
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believe that 'Our services combined with our investors' trust will lead to a prosperous
Swastika family

We are committed for :

 Integrity and transparency in all transactions,
 Providing investment solutions based on quality and unbiased research,

 Providing personalized services to all investors and business associates,

 Achieving success through client’s growth .

Equity

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Offering
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DATA ANALYSIS AND SERVICES

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