ICICI Prudential Mutual Fund has come up with a new close-ended equity fund based on the ‘Rising Bharat’ theme. It will have a tenure of 3.5 years. The fund was launched on 17th January 2018 and will remain open for subscription till 31st January.

The fund will focus on infrastructure sectors such as cement and power, besides banks, NBFCs, rural consumption oriented firms such as Britannia and Hindustan Unilever and so on. The overarching theme is ‘Rising Bharat’ and draws its rationale from government infrastructure programmes. 

Investment focus

It draws heavily on government programmes such as Pradhan Mantri Awas Yojana (PMAY), “housing for all by 2022” and bank recapitalisation to spur growth in infrastructure and construction companies, banks, NBFCs and rural consumption play.

These are the three themes:

  1. Build Bharat (Cement, Power, Construction and Steel). This means companies such as ACC, Powergrid, L&T and Tata Steel.
  2. Financing Bharat (Banks, NBFC, Microfinance and Auto Finance). Companies such as SBI, Muthoot Finance, Manappuram Finance and Magma Fincorp.  
  3. Rural Bharat (Auto, Chemicals, Consumer Durables). Companies such as M&M, PI Industries, Voltas, ITC, Britannia and Hindustan Unilever.

What to keep in mind

Growth in India is picking up with PMI (Purchasing Manager’s Index – a key indicator) hitting a five year high in December. Much of this growth is indeed going to come from infrastructure and rural consumption. However, the close-ended structure has its distinctive upsides and drawbacks.

On the positive side, you cannot easily exit the fund if markets fall, protecting you from your own emotions. On the negative side, the 3.5-year tenure forces the fund to exit its holdings in a short and somewhat arbitrary time period.

The fund will be managed by a seasoned team including the fund house’s Chief Investment Officer Sankaran Naren.

Offer details

Offer Period: 17th-31st January 2018

Tenure: 1262 days (About 3.5 years)

Minimum Investment Amount: Rs 5,000

Benchmark: BSE 500

Fund Managers: Sankaran Naren, Vinay Sharma, Mittul Kalawadia

For more details, click here.

Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at neil@rupeeiq.com.