The NFO is currently open for subscription and closes on
October 27. So far, ICICI Prudential has collected close to Rs. 1,200 crore from
the first three series of ICICI Prudential Growth Fund.
Earlier this month, Birla Sun Life MF and Sundaram MF too had
come out with their close end equity schemes. Last month, five close end equity
funds mopped up over Rs.1,600 crore from the market.
This 42-month closed end equity fund aims to provide
capital appreciation by investing in a portfolio of equity and equity related
securities. According to its scheme offer document, the fund manager will use a
combination of top-down and bottom-up approach while seeking to identify
companies whose revenues and earnings are expected to increase at a faster rate
than the average company within the same industry.
In a press release, Nimesh Shah, M D & CEO, ICICI
Prudential MF said, “India’s economic cycle is showing signs of revival and is
possibly out of the low growth - high inflation cycle. The macro trend so far
has been encouraging with key macro indicators like Current Account Deficit
(CAD), Balance of Payment (BOP), Inflation and Foreign Institutional Investors
(FII) flows showing improvement. The softening of commodity prices could
further make the environment conducive for equities. Therefore, we believe that
equities could see reasonable returns as factors that characterize a market top
- like industrial production growth in double digits, lower interest rates and
inflation are likely in the next 2-3 years”
Explaining the rationale behind launching this fund, the
press release said, “Recent government steps such as de-bottlenecking of large
infrastructure projects could improve capacity utilization and boost growth. India’s expense to
Gross Domestic Product (GDP) ratio has declined from 2010 levels which provides
headroom for the Government for investment in capital expenditure.”
The minimum application amount is Rs 5,000 and scheme will
be benchmarked against CNX Nifty Index. Yogesh Bhatt, Vinay Sharma and Ashwin
Jain will manage this fund.
The trend of close end funds started last year with IDFC’s Equity Opportunities Fund. Recently, UTI Focused Equity Fund collected Rs. 770 crore during its NFO, becoming the highest grosser in the closed end equity fund category.
