SBI Mutual Fund Unlisted Shares

Annual Report Summary

The 30th Annual Report of SBI Funds Management Limited (SBIFML) for the financial year 2021-2022 highlights both standalone and consolidated financial performance.

I. Financial Performance:

• The company reported a total income of ₹1,99,562 lakh on a standalone basis and ₹2,00,014 lakh on a consolidated basis, compared to ₹1,61,777 lakh and ₹1,62,005 lakh respectively in the previous year.
• Profit for the period was ₹1,07,065 lakh (standalone) and ₹1,08,237 lakh (consolidated), up from ₹86,276 lakh and ₹86,264 lakh in the previous financial year.
• An interim dividend of ₹3 per equity share of ₹1 each was declared on March 23, 2022.
• ₹500 lakh was transferred from Profit and Loss to the General Reserve during the period.
• The paid-up value of equity shares outstanding as on March 31, 2022, was ₹5033.05 lakh, compared to ₹5,009.25 lakh on March 31, 2021.
• The net worth of the Company increased from ₹2,57,460 lakh to ₹3,57,097 lakh.

II. Subsidiary and Associate Companies:

• SBI Funds Management (International) Private Limited, a wholly-owned subsidiary, provides investment management services to offshore funds, SBI Resurgent India Opportunities Fund (SBIRIOF) and SBI India Opportunities Fund. This subsidiary declared and paid a dividend of ₹113.71 lakh.
  • The subsidiary's total income was ₹566.87 lakh and profit after tax was ₹247.25 lakh.
• SBI Pension Funds Private Limited, an associate company in which SBIFML has a 20% equity share, is a Pension Fund Manager managing pension funds under the New Pension Scheme.
  • The associate's total income was ₹11,648 lakh and profit after tax was ₹5,198 lakh.
• There was no Joint Venture with any company during the financial year under review.

III. Business Environment:

• The report analyzes the global and Indian macroeconomic environment, including the impact of the Russia-Ukraine conflict on commodity prices, inflation, and monetary policy.
• Global inflation has been on the rise because of supply-chain issues and geopolitical tensions. Key central banks are shifting policies to stabilize inflation, with the US Federal Reserve expected to hike rates significantly.
• The Indian economy faced challenges due to the second wave of COVID-19 but showed improvement in the second half of FY 2022 due to vaccinations and targeted fiscal support.
• Overall, the growth for the year is likely to come in at 8.9% (real Gross Domestic Product (GDP)).
• On the fiscal front, government re-oriented the fiscal policy towards consolidation with FY 2022 combined fiscal deficit at 10.3% of GDP.
• A turn in the domestic monetary cycle now looks inevitable and could get more restrictive to tackle inflationary risks.

IV. Outlook:

• Equity Market: A correction in market sentiment has been observed, and valuations have expanded. Immediate earnings outlook appears uncertain. Inflation challenges may lead to a demand slowdown. US bond markets are showing signs of a growth slowdown.
• Debt Market: The RBI has commenced a rate hike, ending the easy monetary policy. A transition to more neutral liquidity levels is anticipated. Demand-supply imbalances are expected to persist, causing significant volatility and continued curve steepness.

V. Industry Environment and Regulatory Developments:

• The Indian Mutual Fund (MF) Industry witnessed a decent annual growth of 19.5% in the Quarterly AAUM during the year.
• Several key SEBI regulations/guidelines were announced, including enhanced disclosures on risk, revised overseas investment limits, potential risk class (PRC) matrix for debt schemes, liquidity risk management norms for debt schemes, deployment of unclaimed amounts, risk-o-meter, and swing pricing framework.

VI. Business Performance of SBI Mutual Fund:

• SBI Mutual Fund (SBIMF) grew by 28.27% in terms of Quarterly AAUM, the highest among the top six fund houses. It held the top rank in the industry for average AUM with a 1.15% market share gain and comprised ~33.2% of the industry's new net inflows.
• The company managed total assets of about ₹16,49,981 Crores as on March 31, 2022.
• The business parameters of the Portfolio Management/Advisory services, Alternate Investment Funds, Offshore Fund and Retail Portfolio Management activity was also given.
• SBIMF was the largest ETF Asset Manager in India, with QAAUM of ₹198,166 Crore and 46% market share.
• SBIMF launched twenty-five new fund offers, including SBI Balanced Advantage Fund and SBI Multicap Fund. SBI Balanced Advantage Fund became the largest NFO in the Indian mutual fund industry.

VII. Investor Education and Social Responsibility:

• The company has been focusing on topical investor messages and using multiple communication mediums to engage with investors.
• Multiple activities include content development, social media engagement, digital marketing, public relations, and media campaigns.
• The AMC has conducted 151 Investor Education meets with more than 5,206 participants in FY 2022.
• SBI Funds Management Limited was appointed by the Supreme Court of India to undertake liquidation and distribution of assets of six schemes of Franklin Templeton Mutual Fund.

VIII. Achievements, Future Plans, and Other Disclosures:

• SBIMF was the first Mutual Fund house to cross ₹6 lakh Crore in AUM with ~24% overall market share. Also crossed ₹1070.65 Crore PAT.
• SBIMF was certified as a 'Great Place To Work' for the 3rd time in a row.
• Future plans include expanding into alternates business lines, launching solution-oriented fund of funds, increasing physical network through "Jan Nivesh through Bharat Outreach" and creating new tools and solutions for investors.
• Details pertaining to CSR activities, Directors, Committees, KMP, ESOP, Vigil Mechanism, Model Code of Conduct, Internal Financial Controls, and Directors' Responsibility Statement are provided.

IX. Auditors:

• M/s. Borkar and Muzumdar are the statutory auditors appointed by the Comptroller and Auditor General of India. There were no qualifications, reservations or adverse comments or disclaimers made by the aforesaid in their audit reports.

In addition to all above, there are more annexures pertaining to the Financial statements.