The share price of HDFC Asset Management Company and Nippon Life India Asset Management managed to recover a majority of losses in trade today after RBI announced Rs 50,000-crore special liquidity facility for mutual funds amid heightened volatility in capital markets.
On Friday, HDFC Asset Management Company share closed 6.38% or 165 points lower at Rs 2,425 and Nippon Life India Asset Management stock ended 17.48% or 47 points lower at Rs 216.25 a day after US-based Franklin Templeton closed its six credit fund schemes.
While share price of HDFC Asset Management Company closed 5.26% higher at Rs 2,552, that of Nippon Life India AMC rose 11.38% to Rs 240.85 today.
Share price of HDFC Asset Management Company rose up to 7.96% to Rs 2,618 intraday, and Nippon Life India AMC stock gained up to 13.66% to Rs 245 on BSE.
HDFC Asset Management Company share has gained after four days of fall.
The stock stands higher than 20-day moving averages but lower than 5-day, 50-day, 100-day and 20- day moving averages. However, during the last one year, the stock has gained 58.48%. It has fallen 20.14% since the beginning of this year.
Share of Nippon Life India Asset Management stock also gained on account of strong sentiment in the industry after RBI's liquidity boost. However, the stock stands lower than its 5-day, 20-day, 50-day, 100-day and 200-day moving averages.
It has gained 19% in the last one year but lost 32% since the beginning of this year.
The central bank said liquidity strains on mutual funds had intensified in the wake of redemption pressures. "The stress is, however, confined to the high-risk debt MF segment at this stage; the larger industry remains liquid," the apex bank clarified.
On Thursday, after market hours, US-based Franklin Templeton announced the closure of its six credit fund schemes. The six funds are Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund. The move resulted in locking in of Rs 30,800 crore of investor wealth.
After winding up of schemes, existing investors are not able to withdraw funds, buy fresh units, transfer to equity schemes or make systematic withdrawals to meet their monthly expenses.