The mutual fund industry lost a staggering Rs 1.27 lakh crore from its average assets in June, of which the Anil Ambani group's Reliance MF alone accounted for a full 15 percent.
However, the decline was bigger in case of JM Financial and Axis MF, which lost over 36 percent each from their assets, against 15 percent drop on Reliance MF.
The average assets under management (AUM) of the 39 fund houses in the country plunged by Rs 1.27 lakh crore or 16 percent in the last month. The average AUM of the industry stood at Rs 6,75,858 crore, as per the data available with the industry body AMFI.
Six relatively smaller fund houses, including Edelweiss MF, Fidelity MF and Mirae Assets, emerged as better-managed funds with their average assets rising during the month.
The largest fund house Reliance MF witnessed a drop of 15 percent in its AUM, while JM Financial and Axis MF were the biggest losers with over 36 percent value erosion.
At the end of June, the AUM of Reliance MF dropped by nearly Rs 18,000 crore to Rs 1.01 lakh crore. The AUM of second largest fund house HDFC MF declined 15 percent or over Rs 15,000 crore to Rs 86,648 crore, while ICICI Prudential MF saw its average assets plunging by 16 percent to Rs 73,800 crore.
"June has seen a sharp withdrawal by banks. Corporate houses withdrew from schemes to meet the advance tax payment deadline. Also, the bidding for the 3G and broadband spectrum brought some liquidity crunch into the system," L&T MF chief executive Sanjay Sinha said.
The government generated a revenue of over Rs 1 lakh crore through the 3G and BWA auctions against an estimated Rs 35,000 crore, resulting in some liquidity crunch. There have been large-scale withdrawals from MFs in the recent months, which perhaps is leading to the decline in the AUMs despite an upward move in the stock market-- in June itself the Sensex rose by 4.5 percent.
"Inflows into MFs could improve in the second half of July by when the tight liquidity condition is expected to ease," Sinha added.
The average AUM of UTI MF declined by over Rs 14,000 crore or 18 percent to Rs 64,446 crore. Those funds which saw a drop in their AUMs also include Fortis MF (32 percent), Taurus MF (20 percent) and Canara Robeco (20 percent) and SBI MF (7 percent).