Riding Volatile Market Waves

by Hansraj Agrawal | Mar 21, 2026 | Share Market

Indian equity markets have remained volatile over the past 15–18 months, offering little directional clarity for investors. For those with a moderate risk appetite and concerns around this volatility, balanced mutual fund categories can offer a more measured approach. Aggressive hybrid funds, in particular, allocate 65 to 80 per cent to equities, with the remainder in debt instruments, allowing investors to participate in market upswings while cushioning downside during corrections.

Kotak Aggressive Hybrid Fund (KAHF) stands out as a consistently better-performing fund in this category. With a track record of over 27 years, it has delivered a compounded annual growth rate (CAGR) of 14 per cent since inception.

Equity-heavy portfolio

At the portfolio construction level, the fund maintains a relatively high equity allocation. Over the past three years, equity exposure has ranged between 69 and 80 per cent, and currently stands close to the upper end of that band.

On the equity side, stock selection is anchored in a few core principles. The fund prioritises strong cash-generating businesses that can fund growth internally rather than relying on excessive debt or equity dilution. Return on capital is expected to exceed the cost of capital, typically above 12–15 per cent in most cases. It also evaluates management discipline in capital allocation and avoids companies diversifying into unrelated businesses. Alongside these factors, the focus remains on companies with visible and sustainable earnings growth over the next three to four years.

Within equities, around 45 per cent is invested in large-cap companies, while 30–35 per cent is allocated to mid- and small-cap stocks. This mix has remained broadly consistent over time. However, the relatively higher allocation to mid- and small-cap stocks may add to the portfolio’s risk.

Sectoral preferences

The fund’s sector positioning reflects a tilt towards structural growth themes rather than cyclical or commodity-driven segments. Within consumption, it prefers emerging segments such as quick commerce over traditional FMCG businesses, which are currently facing margin pressures and slower growth. Consumer durables is another key overweight, with exposure to segments such as air conditioners and electronics manufacturing, both benefiting from rising discretionary demand and formalisation.

Healthcare, particularly hospitals, is another preferred segment. The fund manager views this as a long-term structural opportunity, driven by rising healthcare demand, under-penetration of organised hospital infrastructure and increasing reliance on private providers. The portfolio includes names such as Fortis Healthcare and Max Healthcare Institute.

On the IT sector, the fund maintains a neutral stance despite prevailing negative sentiment around AI. It sees valuations as attractive, with many IT stocks trading at 20–22 times earnings compared to higher multiples in the broader market, along with dividend yields of 3 to 4 per cent. The fund manager believes concerns around AI are overstated, as companies will continue to benefit from demand for cloud migration, data management and digital transformation. The fund currently has about 7 per cent exposure to IT, with key holdings including Infosys, Mphasis and Oracle Financial Services Software.

The fund remains broadly neutral on sectors such as banking, financials, telecom and power, while staying underweight on commodities such as oil and gas and metals.

Debt portion

On the fixed income side, the fund follows a blend of accrual and duration strategies. Over the past five years, its Macaulay duration has ranged between 2 and 10 years. Currently, the portfolio holds about 10 per cent in government securities, 2 per cent in corporate debt and 4 per cent in money market instruments.

The fund largely avoids credit risk. Its exposure to lower-rated instruments is minimal, with only about 1 per cent invested in AA-rated bonds issued by Andhra Pradesh Beverages Corporation and Telangana State Industrial Infrastructure Corporation.

Performance

The fund’s performance has been notable. Five-year rolling returns, calculated over the past seven years, show a CAGR of 18 per cent compared with the category average of 16 per cent. During this period, returns ranged from 11.7 per cent to 25 per cent, with nearly 90 per cent of observations delivering returns above 15 per cent.

On costs, the regular plan’s expense ratio stands at 1.73 per cent, below the peer average of 2 per cent, while the direct plan’s expense ratio is 0.47 per cent, also lower than the category average of 0.8 per cent.

Overall, the fund is suited for investors with medium-term horizons of at least five years. Given the current volatile market conditions, a systematic investment approach may be more appropriate.

Published on March 21, 2026

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SEBI formalises same-day borrowing for mutual funds; AMC to bear cost

by Hansraj Agrawal | Mar 21, 2026 | Share Market

Mutual funds, primarily liquid and overnight schemes, routinely face a timing mismatch between when they pay investors and when they receive cash from underlying instruments. Simply put, mutual funds sometimes have to pay investors before money from their own investments comes in.

Redemption proceeds are typically paid out the next business day morning, while inflows from TREPS (Tri-Party Repo Dealing System) and reverse repo often arrive later the same day. To bridge this gap, mutual funds enter into formal same-day borrowing arrangements with financial institutions such as banks.

A March 13, 2026 SEBI circular (https://tinyurl.com/sebimfborrow) operationalises this practice under the new SEBI (Mutual Funds) Regulations, 2026, effective April 1, 2026. It sets clear rules for such borrowing, exempts same-day borrowing from the 20 per cent cap, and clarifies who bears the cost and risk.

Timing gap

Schemes, especially liquid and overnight funds, process redemption payouts before receiving maturity proceeds from instruments such as TREPS and reverse repos. This creates a same-day liquidity gap. To avoid delays in payouts, funds borrow for a few hours until receivables are credited later in the day. While such arrangements already exist, the absence of explicit regulatory detailing leaves room for variation in implementation.

Mutual fund schemes can generally borrow up to 20 per cent of assets for redemptions, investor payouts or certain trade settlements, for up to six months. But this cap will not apply to same-day borrowing, subject to SEBI’s conditions.

Usage rules

The SEBI circular lays down a clear framework for same-day borrowing.

First, the asset management company and the mutual fund’s trustees must approve this borrowing policy, and it must be disclosed on the asset management company’s website.

Second, the use of intraday borrowing is restricted to specific purposes: meeting redemption obligations, paying interest or income distribution cum capital withdrawal (IDCW), and related payouts to unitholders. It cannot be used for broader leverage or investment activities.

Third, the fund can borrow only against money that is due to come in the same day. Funds can borrow only up to the level of “guaranteed receivables” due from specified sources such as the Government of India, RBI and Clearing Corporation of India Ltd. This is money that is assured to come in the same day. Eligible receivables include maturity proceeds from TREPS and reverse repo, proceeds from government securities and treasury bills, interest on such securities, and sale proceeds of these instruments. This means the borrowing must be backed by money that is expected the same day, and cannot be unlimited.

Cost burden

A key clarification in the circular relates to who bears the cost of such borrowing. SEBI states that any cost of intraday borrowing must be borne by the AMC and not charged to the scheme.

Further, if there is any delay or shortfall in receiving the expected funds due to unforeseen events or settlement issues, the resulting cost or loss must also be absorbed by the AMC.

This effectively separates operational liquidity management from investor returns. The scheme’s NAV is not meant to reflect the cost of bridging short-term mismatches arising from fund operations. In other words, investors should not bear these operational borrowing costs through the scheme.

In addition, AMCs are required to comply with existing regulatory provisions relating to borrowing and liquidity management, including clauses under the Fourth Schedule of the 2026 regulations and relevant provisions of the SEBI Master Circular for mutual funds.

ETF clause

The market regulator also addresses borrowing by equity-oriented index funds and ETFs (exchange traded funds). Stock exchanges will introduce a closing auction session, a final price-setting window at market close, from August 3, 2026.

If these funds are unable to complete all their sale transactions during market hours, they may borrow only to participate in the closing auction session. This means such borrowing is allowed only to help these funds complete trades within the exchange’s trading framework.

Overall, the circular formalises a narrowly defined, operational use of borrowing within mutual funds. It gives funds flexibility for same-day borrowing, but only with clear limits on how the money can be used, how much can be borrowed and who approves it.

By making the AMC bear the cost and risk, the rules keep investors separate from the fund house’s day-to-day cash management.

Operational cash mismatches stay ring-fenced, with fund houses absorbing risk

Published on March 21, 2026

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Sun Pharma launches its semaglutide injection under the brand names, Noveltreat and Sematrinity in India

by Hansraj Agrawal | Mar 21, 2026 | Share Market

Sun Pharmaceutical Industries has announced the launch of its semaglutide injection in India under the brand names Noveltreat and Sematrinity, across multiple strengths for the treatment of obesity and Type 2 diabetes.

The company said Noveltreat is indicated for chronic weight management in adults, to be used alongside a reduced-calorie diet and increased physical activity. It is available in five dose strengths, 0.25 mg/0.5 mL, 0.5 mg/0.5 mL, 1 mg/0.5 mL, 1.7 mg/0.75 mL, and 2.4 mg/0.75 mL.

Sematrinity, on the other hand, is indicated for adults with insufficiently controlled Type 2 diabetes mellitus as an adjunct to diet and exercise. It is available in two dose strengths: 2 mg/1.5 mL and 4 mg/3 mL. The company stated that both therapies are priced significantly lower than the innovator brand, with weekly treatment costs ranging from approximately Rs 900 to Rs 2,000 for Noveltreat and Rs 750 to Rs 1,300 for Sematrinity.

Sun Pharma said the products are delivered through user-friendly, pre-filled pen devices. Noveltreat features a concealed needle designed to reduce injection-related anxiety and improve safety and dosing accuracy, while Sematrinity is offered in a multi-dose pen format with a smooth dialer for flexible and precise dose administration. The pens have been developed by global pharmaceutical device suppliers and are manufactured in Europe.

Sun Pharma highlighted that GLP-1 receptor agonists, including semaglutide, are widely used for the treatment of Type 2 diabetes and obesity, offering benefits such as improved glycaemic control and reduced cardiovascular and renal risks.

Citing data from the National Family Health Survey-5 (NFHS-5), the company noted that nearly one in four Indians aged 1549 is overweight or obese, with associated risks including metabolic disorders, cardiovascular diseases, and cancer. It also referred to the ICMR INDIAB study (2023), which estimated that over 101 million people in India are living with diabetes, with a significant proportion failing to achieve glycaemic targets, underscoring the need for effective treatment options and comprehensive disease management.

Kirti Ganorkar, managing director, Sun Pharmaceutical Industries, said, With the launch of Noveltreat and Sematrinity, our endeavour is to provide a high-quality, affordable therapy to a wider patient community in India. We are offering a comprehensive range, backed by our decades of expertise in manufacturing complex medicines. To further support patients, we are also introducing a holistic patient support program intended to guide them throughout their treatment journey.

Sun Pharmaceutical Industries is engaged in the business of manufacturing, developing and marketing a wide range of branded and generic formulations and active pharmaceutical ingredients (APIs). The company and its subsidiaries has various manufacturing facilities spread across the world with trading and other incidental and related activities extending to global market. It is the largest pharmaceutical company in India.

The company has reported a 16.03% rise in consolidated net profit to Rs 3,368.81 crore on a 13.49% increase in revenue to Rs 15,520.54 crore in Q3 FY26 over Q3 FY25.

The counter rose 1.90% to settle at Rs 1,777.45 on the BSE.

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Sun Pharma launches semaglutide injection under two brands in India

by Hansraj Agrawal | Mar 21, 2026 | Share Market