Nippon India Mutual Fund has recorded profit of Rs.137 crore in July-September 2019 as against Rs.114 crore in the corresponding period last fiscal, a growth of 20%, says a press release issued by the company.
An analysis of earnings growth of the fund house shows reduced expenses incurred on distribution has helped the fund house report strong earnings. Regulatory changes such as banning upfront commission and asking AMCs to pay commission from the scheme instead of AMC book have helped fund houses reduce their expenses incurred on distribution commission.
The AMC incurred expenses worth Rs.135 crore as fees and commission in Q2 FY 2019-20, 76% lower from Rs.560 crore in the corresponding period last year.
Another factor that has contributed to the profit is the introduction of corporate rate tax cut. While the company has recorded profit before tax of Rs.158 crore in Q2 FY 2019-20 (a decrease of 2% compared to the corresponding period last year), the company ended up posting 20% growth in profit after taxation largely supported by the lower tax rate, said the company statement.
Nippon India Mutual Fund had posted profit of Rs.126 crore in April-June 2019 indicating that the fund house has reported overall profit of Rs.262 crore in the first half-year current fiscal.
Nippon India MF manages AUM of Rs.2.03 lakh crore as on September 2019.
Overall, the AMC has AUM of Rs.4.54 lakh crore across all businesses, which include PMS, AIF and offshore advisory services among other things.
