NFO Review - ICICI Prudential Value Fund - Series 19

India Infoline News Service | Mumbai | December 17, 2017 14:54 IST

ICICI Prudential Value Fund – Series 19 is a close ended equity fund, which will primarily invest in sectors benefiting from government reforms and likely to do well in 3.5 years investment horizon.

ICICI Prudential Value Fund – Series 19 is a close ended equity fund, which will primarily invest in sectors benefiting from government reforms and likely to do well in 3.5 years investment horizon. The fund will follow bottom-up approach while selecting the stocks in each sector, and will reduce the equity exposure at market peaks. Fund can invest 80-100% in equity and 0-20% in debt instruments depending upon market scenario. Moreover, to limit the downside risk of the portfolio, fund can invest in derivatives up to 50% of the net asset of the scheme.

The Fund will invest in the following key themes:
1) Infrastructure
Government has announced to spend Rs6.92 lakh crore to spend on road construction in next five years. Further, it is targeting to construct ~83,000 kms roads by 2020, including ~35,000 kms Bharatmala project. Further, government has allocated ~Rs1.31 lakh crore to commission ~3,500 kms of railways line in FY2018. In addition, railways to electrify ~90% of the total railway lines by FY21. Government has also planned to spend Rs1.63 lakh crore on electrification of ~4 crore households by FY18 under Saubhagya Scheme.
 
2) Housing for All (Pradhan Mantri Awaas Yojana)
Government’s envisage to provide housing for all by 2022 will increase the spending in infrastructure sector. Government is targeting to build 2 crore houses in urban and 3 crore units in rural India.
 
3) Recapitalization of PSU banks
Recently, government has announced recapitalization plan for PSU banks of Rs2.11 lakh. This will improve the capital adequacy ratio of banks and resolve their NPA issues leading to credit growth.
 
4) Revival in rural demand
Government has planned to spend ~Rs81,975cr on housing for all in rural India. Apart from that government has already approved to spend Rs50,000cr during 2015-20 under Pradhan Mantri Krishi Sinchayee Yojana. Further, under crop insurance, the gross coverage area has increased to 30% in FY2017 from 25% in FY2016. In addition, government has also launched eNAM to provide farmers better pricing power.

Key Sectors
Cement, Steel, Construction Projects, Power, Banks, NBFC, Chemicals, Consumption, Consumer Durables and Auto
 
Thus, we recommend the fund to aggressive investors, who are ready to take exposure in equities with an investment horizon of 3.5 years.
 
Below are the scheme details:

Scheme Details
Fund Type Close-Ended Equity Scheme
Fund Manager Sankaran Naren and Vinay Sharma
NFO Period Dec 21, 2017 – Jan 04, 2018
Benchmark S&P BSE 500 Index
Tenure 1262 days from the date of the allotment of the units
Minimum Allocation Rs 5,000 and in multiple of Rs 10 thereafter.

 

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