UTI's market share takes hit - Views on News from Equitymaster

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UTI's market share takes hit

Nov 22, 2000

Unit Trust of India (UTI) has had a towering presence on the Indian mutual fund scene. However, younger upstarts (private sector funds) are changing that. UTIís market share has been on the wane for quite some time now. While this may not be UTIís fault per se, investors seemed to have taken a negative view of UTIís lack of transparency. And a performance lag vis-ŗ-vis its peers hasnít helped its case either.

Private sector funds that have arrived on the scene only over the past 2 years have only been too glad to take over the mutual fund mantle from UTI. With a lot more transparency, impressive service levels and performance to boot, private sector funds have slowly but surely made their presence felt on the domestic scene. UTI being the market leader, has been the main victim, surrendering market share to private funds.

From over 70% market share in 1999, UTIís market share has slumped to just below 65% as on October 31, 2000. In October itself, UTI has witnessed its market share slide from 66.2% (as on September 30, 2000) to 64.8%.

On the other hand, private sector funds have enhanced market share from a mere 19% in 1999 to over 27% as on October 31, 2000. It is safe assume that a great deal of this growth has come at UTIís expense. And with the way private sector funds have been growing, this trend is unlikely to reverse over the coming months.

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