Capitaline

Analyst Meet / AGM 27-Jul-18

Conference Call

Reliance Nippon Life Asset Management

Monthly SIP inflows rises to Rs 830 crore

Reliance Nippon Life Asset Management conducted a conference call on 26 July 2018 to discuss its financial results for the quarter ended June 2018. Sundeep Sikka, ED & CEO of the Company addressed the call:
Highlights:

The company has dopted Indian Accounting Standards (IND AS) with effect from 1 April 2018. Results of Q1FY19 are in compliance with IND AS requirements. Additionally, for Q1FY18, figures have been recast to adhere to the IND AS requirements. Impact of IND AS transition is mainly on other income, as investments need to be fair valued in the opening balance sheet and any mark-to-market changes are to be routed through the P&L statement.
The mark-to-market losses on investment stood at Rs 18 crore in Q1FY2019 against gains of Rs 21 crore in Q1FY2018. Accordingly, the profit before tax excluding the MTM impact has increased 35% to Rs 180 crore in Q1FY2019 over Q1FY2018.
The company continues to focus on sustainable profit growth and expanding RoEs.
Assets under management increased 12% to Rs 407389 crore end June 2018 over June 2017. Mutual Fund assets under management (QAAUM) rose 8% to Rs 240445 crore end June 2018.
The company is leader in generating retail assets with retail AUM of Rs 77987 crore, while it added highest amount retail assets at Rs 19616 crore in the industry since June 2017. Retail assets accounts for 32% of the overall mutual funds AUM, which is one of the highest in the industry.
Equity Assets as a proportion of MF assets grew from 29% to 37% as on June 2018 (QAAUM basis) as focus continues on high yielding assets.
The company does not overly depend on any distributor, as no individual distributor account for more than 4.5% of AUM.
The mutual fund has AUM of Rs 39056 crore from 'Outside the Top 30 cities' category end June 2018, amounting to 16.3% of overall mutual fund AUM.
With over 27.8 lakh Folios, the annualised SIP book has crossed Rs 10000 crore end June 2018. The monthly SIB inflows have surged to Rs 830 crore per month.
The company has substantially increased digital purchase transactions by 26% to 1.5 lakh in Q1FY19.
The company is one of the largest ETF players with 15.4% market share in terms of OAAUM.
Reliance AIF has total commitment of over Rs 2200 crore, raised commitment of over Rs 200 crore in Q1FY19.
With addition of 16 new locations in Q1FY19, RMF has a pan India presence across 298 locations. However, the company is present in 100 such location, where no other mutual fund exists. The company aims to raise presence to 500 locations, but it would go slow on new expansion after recent strong branch expansion.
The company has so far utilized about Rs 162 crore from IPO receipts. It has set aside significant amount for funding of inorganic growth opportunity and keeping a close eye.
As per the company, the mutual fund AUM has doubled in last five years, while number of folios has increased only 24%. The company expects the number of mutual fund folios to increased from existing 5.4 crore to 15 crore in next 5-10 years.

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