ICICI Prudential Asset Management Company

Exposure to Market and Economic Volatility: A large part of the revenues is generated through management fees on mutual funds, PMS, AIFs, and advisory services. Economic or market adversities-such as lower consumer savings, weak investor sentiments, or broader macro-economic unsteadiness-may reduce the AUM levels and, therefore, the revenues, profitability, and cash flows. Underperformance of Investment Products:

If investment products offered by the company fail to outperform their respective benchmarks or competing funds, AUM may decrease because of investor redemptions or lower contributions. Performance limitations, including market volatility and restrictions on investment policy, will also hurt returns. Any sustained underperformance directly reduces management fees and negatively affects business and financial results. Intensifying Competition in the Asset Management Industry: Competition from existing players and new entrants, and alternative avenues of investment such as bank deposits, insurance products, gold, and real estate, threaten the AMC industry.