Reliance Capital Asset Management Ltd. has raised 57 billion rupees through its new Reliance Equity Fund, the largest by an Indian scheme, to become India's top equity fund house by assets.

The fundraising announced on March 16 broke a 14-year-old record and gives Reliance Capital Asset Management, the mutual fund arm of Reliance Capital Ltd., assets of 139.7 billion rupees.

Vikrant Gugani, President of Reliance Capital Asset Management, told Reuters the record collections were mainly due to its track record and an emphasis on selling in the hinterland.

"Our ongoing focus is on distribution and going for rural and semi-urban townships," he said.

Reliance Capital Asset Management said the money was raised from nearly a million investors, also a record for a new fund offer.

The earlier record for capital raised through a new fund was held by UTI Mastergain, which collected 47.83 billion rupees in 1992, according to fund tracker Value Research.

Sandeep Parwal, Managing Director of SPA Capital Services Ltd., said the previous record for most investors was 350,000, held by State Bank of India's Bluechip Fund, which closed in January and raised 28.5 billion rupees.

"The markets are at a high and investors are looking to enter into stocks through the mutual fund route, instead of direct participation," Delhi-based Parwal said. "Also the performance of other Reliance funds has been better than competitors."

Retail investors have flocked to the booming stock market in the past two years. The main 30-issue benchmark index is near all-time highs on hopes that strong growth in Asia's third largest economy will feed companies' bottom lines.

The index hit a new high of 10,896.39 points on March 14.

Reliance Capital Asset Management reaches across India from 80 locations and works through independent financial consultants to raise funds. The Reliance brand also pulled in a lot of investors, Parwal said.

The average application size was 60,000 rupees and investors from more than 400 towns had participated, Gugani said. Reliance Equity Fund was open between Feb. 6 and March 7.

Gugani declined to say where he would invest the money from the diversified equity scheme, which can also use derivatives.

(www.financialexpress.com)