ICICI Prudential Asset Management Co said redemptions from its mutual funds have increased, hurting net flows even as gross sales across the industry have remained broadly steady.
“Right now the redemptions are slightly higher, yes they are slightly higher,” Chief Financial Officer Naveen Agarwal said on an earnings call on Monday. The fund house, India’s second largest by mutual fund assets, said it could not determine whether redeemed money was moving into other ICICI Prudential schemes or leaving the company altogether.
Agarwal said gross flows at the industry level had stayed “pretty much consistent”, suggesting that higher withdrawals rather than a broad deterioration in investor purchases were behind the moderation in net sales.
“Gross flow is based on what is happening in the market and that pretty remains the same as it was last year,” he said. “What has changed is that the redemptions.”
The company has seen more elevated redemptions in some categories, including hybrid funds, while investor flows have increasingly gravitated to mid- and small-cap products, management said. Mid- and small-cap schemes accounted for 43% of industry equity net flows in the September quarter, up from the previous quarter.