The combined average assets under management (AUM) of the 35 fund houses in the country saw an erosion of over Rs 97,000 crore (Rs 970 billion) and dropped to Rs 4,31,901.42 crore (Rs 4.31 trillion) at the end of October.

At the end of September, the average AUM had been Rs 5,29,102.92 crore (Rs 5.29 trillion), according to the data released by the Association of Mutual Funds in India.

The top five fund houses - Reliance [Get Quote] MF, HDFC [Get Quote] MF, ICICI [Get Quote] Prudential, UTI MF and Franklin Templeton lost a combined over Rs 45,000 crore (Rs 450 billion) in the month from their assets.

According to analysts, plunge in the stock market and huge redemptions in liquid schemes by corporates and banks has led to the sharp decline in assets of fund houses.

Reliance Mutual Fund suffered the biggest fall of Rs 15,400.75 crore (Rs 154 billion) in its average AUM at the end of October.

However, despite a 17.81 per cent fall in its AUM, it continues to be the top fund house in the country with assets valued at Rs 71,093.70 crore (Rs 710.93 billion) at the end of October, against Rs 86,494.46 crore (Rs 864.94 billion) in the previous month.

"The sharp fall of about 25 per cent in valuations of stocks in the secondary market and redemptions in equity as well as liquid schemes and lack of any fresh inflows have led to the decline in the assets under management in the past month, " Taurus Mutual Fund director R K Gupta said.

Further, HDFC MF retained the slot of the second biggest fund house in the country despite a Rs 6,519 crore (Rs 65.19 billion) dip in its AUM. HDFC MFs AUM dropped to Rs 45,479.37 crore (Rs 454.79 billion) from Rs 51,998.28 crore (Rs 519.98 billion) in September.