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LIC Mutual Fund launches Manufacturing Fund, targets Rs 60,000 cr AUM

LIC Mutual Fund launches Manufacturing Fund, targets Rs 60,000 cr AUM

by | Sep 20, 2024 | Share Market


Mutual Funda(Photo: Shutterstock)

4 min read Last Updated : Sep 20 2024 | 10:30 PM IST


LIC Mutual Fund on Friday launched a new Manufacturing Fund, an open-ended equity scheme, and said it is looking to achieve an asset under management of Rs 60,000 crore this fiscal.


The new fund offer (NFO) will remain open for subscription till October 4 while the units under the scheme would be allotted on October 11, the company said. It also said that the scheme will be benchmarked to the Nifty India Manufacturing Index (Total Return Index).


The scheme aims to provide a diversified portfolio of companies that come under the ambit of manufacturing theme, including automobiles, pharmaceuticals, chemicals, heavy engineering products, metals, shipbuilding, and petroleum products, among others, the company said.

 


“The main objective of launching the manufacturing fund is to create wealth for the investors who will be joining this scheme and which will be mainly investing into manufacturing theme companies,” R K Jha, Managing Director and Chief Executive Officer, LIC Mutual Fund told PTI.


On AUM growth expectations, Jha said the company is growing at 25 per cent and is looking to achieve an AUM of Rs 60,000 crore for this fiscal with plans to hit the Rs 1-lakh crore mark by FY2025-26.


He said that LIC Mutual Fund already has an infrastructure fund, which is number one among all its industry peers with more than 75-80 per cent returns in one year.


“If you take a 2-3 years horizon, then the return rate is 35-45 per cent, and there also we are in quartile 1. So, in all the segments whether it is 1, 2, 3 or four years, we are doing exceedingly well as the rate of return is concerned,” he said.


Jha said that the new scheme targets sectors such automobiles, auto ancillary, pharma, capital goods as well as consumption and added that there are quite a good many sectors, which we will be taking into consideration with an approach that will be both top down and bottom up for selection of stocks.


Explaining the contours of the Manufacturing Fund, Jha said that an investor can invest a minimum amount of Rs 300 in SIP on a daily basis and Rs 1000 on a monthly basis with quarterly pegged at Rs 3,000.


“But going forward after the NFO closes (on October 4) and reopens on October 16, the amount of daily SIP will be further reduced to Rs 100 while monthly SIP will be lowered to Rs 200 so all such investors having low income and who want to start with small SIP numbers can also join it.


“Also, those who want to invest in lump sum or in one time, they can start with a minimum amount Rs 5,000 and there is no upper limit either for SIP or in lump sum amount. So people can invest any amount in the manufacturing fund,” he said.


Jha said that there are 11 different manufacturing funds in the market of different Asset Management Companies (AMCs) with total AUM at around Rs 34,700 crore.


“If one goes by other funds like large caps or flexi cap funds or midcap funds, the total AUM is more than Rs 3.84 lakh crore. So this is just the beginning of the Manufacturing Fund that we are going to launch,” he said.


Jha also said that LIC Mutual Fund is looking to come out with an initiative by early next month, offering lower SIP of Rs 100 per day and Rs 200 per months as against Rs 300 per day and Rs 1000 per months now, so that even people with lower income can join the SIP bandwagon.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sep 20 2024 | 10:30 PM IST



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Leela hotels owner Schloss files IPO papers to raise for 9 million

Leela hotels owner Schloss files IPO papers to raise for $599 million

by | Sep 20, 2024 | Share Market


2 min read Last Updated : Sep 20 2024 | 11:52 PM IST


Schloss Bangalore, owner of Indian luxury hotel chain ‘The Leela’, has filed for a Rs 5,000 cr ($599 million) IPO on Friday, aiming to cash in on the country’s red-hot stock market.

 


Schloss is the latest in a string of Indian companies rushing to go public in a stock market that is cruising at record highs and is trailing only Wall Street’s Nasdaq and S&P 500 as the top-performing indexes this year.

 


As of mid-September, about 235 companies have gone public in the country and raised more than $8.6 billion, which exceeds the total amount raised last year, LSEG data showed.

 

 


Schloss is issuing fresh shares worth Rs 3,000 cr, while shareholder Project Ballet Bangalore Holdings (DIFC), an affiliate of Brookfield Asset Management, is selling shares worth Rs 2,000 cr.

 


The company, which operates 12 luxury hotels across India and is planning to add eight more through 2028, said it will use proceeds from the fresh issue to repay debt.

 


Sustained travel demand and successful listings of hotel firms, such as Samhi Hotels and Juniper Hotels have inspired investor confidence in the sector.

 


“The rebound in tourism after the pandemic, especially corporate travel, and an exuberant primary market gives hotel firms an excellent opportunity to take their businesses public,” Kranthi Bathini of WealthMills Securities said.

 


Schloss’ consolidated annual losses narrowed to Rs 2.13 cr in fiscal-ended March 2024 from 616.8 million rupees, a year ago.

 


Revenue per available room (RevPAR), a key metric for hotel owners and operators, rose nearly 23 per cent on-year to 9,592 rupees in the fiscal-ended March 2024.

 


India’s hospitality market is estimated to grow to $31 billion by 2029, from $24.6 billion in 2024.

 


Morgan Stanley, BofA Securities, JPMorgan and Citi are among the issue’s book running lead managers.

 

First Published: Sep 20 2024 | 9:56 PM IST



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Should You Demat Your MF Holdings?

Should You Demat Your MF Holdings?

by | Sep 20, 2024 | Share Market


The convenience of keeping all of one’s investments in a single demat account is appealing. This is possible in the case of one’s mutual fund (MF) holdings too. By converting your MF units to demat form, you can view and manage all your capital investments in one place.

All you need to do is submit a conversion request form (CRF), obtained from your depository participant (broker) for your existing investments. The asset management company, after verification, will confirm the conversion request. But before you set out to fill your CRF, there are certain things that you should know. Read on to find out.

KYC and nomination

By having the MF units in a demat form, one can check all MF holdings and investments such as stocks and bonds in a single window. Investments/ redemptions of MFs and buying/ selling of stocks can be made with a single registered bank account. In case of new investments, there is no need to submit KYC documents with each fund house.

Further, any changes to the basic details such as address, e-mail ID and, more importantly, nomination, once made, will apply to all investments in the demat account. However, a single set of nominations can be a limitation for investors intending to bequeath different MF folios to different heirs.

Costs involved

As far as the costs are concerned, though the process of dematerialisation can cost you, the maintenance of a demat account should not, in most cases. As per SEBI’s circular on Basic Service Demat Accounts (BSDAs) applicable from September 1, if the value of holdings in the demat account at any point of time does not exceed ₹10 lakh (₹2 lakh earlier), then the account qualifies for concessional annual maintenance charges (AMC). If the value of holdings does not exceed ₹4 lakh (₹50,000 earlier), brokers are not supposed to charge any AMC. If the value of holdings does not exceed ₹10 lakh (₹2 lakh earlier), the maximum AMC that brokers can charge is ₹100. Accordingly, most new-age broking platforms have started offering free demat accounts with zero charges for account opening and annual maintenance.

SWP, STP

One of the big disadvantages of having MF units in the demat form is that the investor cannot opt for SWP (Systematic Withdrawal Plan) or STP (Systematic Transfer Plan). Thus, it may hinder the investor in proper financial planning. For example, in a super bullish stock market, one may plan to invest the lump-sum in a debt liquid fund and opt for STP to an equity fund at regular intervals. This may not be possible if the liquid fund units are in demat form.

In our research, we were able to notice certain MF aggregators offering the SWP option. Nevertheless, this should not be a deal-breaker for investors who can manage SWP/ STP manually.

Lock-in period

This apart, if an investor decides to switch to another demat account, transferring of schemes with a lock-in period, such as ELSS (equity-linked saving schemes), may become a problem. All the holdings, such as stocks, MF units and bonds, generally get transferred to the other account. However, restrictions on transfer of units of ELSS during the lock-in period will apply as per the ELSS guidelines.





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September set to be busiest month for IPOs in 14 years: RBI Bulletin

September set to be busiest month for IPOs in 14 years: RBI Bulletin

by | Sep 20, 2024 | Share Market


IPO | (Photo: Shutterstock)

2 min read Last Updated : Sep 20 2024 | 9:07 PM IST


The month of September is set to be the busiest month for IPOs in both mainboard and SME segments in the last 14 years, with over 28 companies entering the market so far, said the Reserve Bank’s latest Bulletin released on Friday.


Financial markets are undergoing shifts, said the article on the state of economy published in the RBI’s September Bulletin.


“In the primary equity market, there is a surge of interest in small and medium enterprises (SMEs) initial public offerings (IPOs), including from domestic mutual funds, with massive oversubscriptions,” it said.

 


Citing a study by market regulator Sebi, the article further said 54 per cent of IPO shares allotted to investors were sold within a week of listing.


“September is set to be the busiest month for IPOs… in 14 years,” the article said, adding that over 28 companies entered the market so far in both mainboard and SME platforms.


The article said resource mobilisation through initial public offerings (IPOs) has remained robust in 2024 so far, as India accounted for the highest number of IPOs globally (27 per cent by volume) in the first half of 2024, led by public offerings of small and medium enterprises (SMEs).


In terms of the amount raised, India accounted for 9 per cent of total proceeds raised through IPOs, it said.


“Investor enthusiasm in the primary segment can be gauged by the fact that the IPO of a housing finance company in the second week of September garnered bids of over Rs 3 trillion,” it said.


The article further said a growing number of listed companies are turning to qualified institutional placements for raising capital, estimated at around Rs 60,000 crore in the first eight months of 2024.


“With intermittent corrections on global cues, benchmark indices in the secondary market have moved up, and the outlook remains bullish,” it said.


The article authored by a team lead by RBI Deputy Governor Michael Debabrata Patra also said global funds have been investing heavily in the Indian debt market for the fifth month in a row since May 2024.


“On the other hand, corporate debt issuances remained low during the financial year so far despite easing yields as issuers awaited the US rate cut,” it said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sep 20 2024 | 9:07 PM IST



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September set to be busiest month for IPOs in 14 years: RBI Bulletin

Spice brand MTR's owner Orkla exploring IPO in 2025, says top executive

by | Sep 20, 2024 | Share Market


2 min read Last Updated : Sep 20 2024 | 10:19 PM IST


The Indian arm of the Norwegian investment company Orkla ASA, which owns spice brands like MTR and Eastern, is exploring the possibility of launching an initial public offering (IPO) in 2025, said a top company executive.


“The ASA board just cleared the proposal. We had done a pre-IPO study last year to understand what we need to do and based on that the board said, ‘okay, let’s go ahead and explore capital markets’,” Sanjay Sharma, CEO, Orkla India, told Business Standard.


“It’s not a definitive direction for us to go, so we are in the process of exploring that. It’s too early for us to have a very clear perspective about it,” Sharma said on the sidelines of the World Food India event being held at Bharat Mandapam. 

 


The top company executive said it should happen “sometime in 2025”.


Orkla ASA entered India in 2007 with its acquisition of Bengaluru-based MTR. In 2011, it bought MTR’s wholly-owned subsidiary Rasoi Magic and acquired the Kerala-based Eastern spices in 2020. In 2023, the company reorganised its businesses under one entity — Orkla India, which has three business units – MTR, Eastern and international.


Meanwhile, the company is also looking to expand its presence in the foods category with wet batters for idlis and dosa and pre-packed regional delicacies like Mysore pak, Bombay halwa, and payasam 


“The wet batter market has started evolving. It is a different kind of market that requires refrigeration. It needs the supply chain and factories to be developed like that. We’re growing month-on-month in the segment and that business is developing well,” said Sunay Bhasin, CEO, MTR.


The company is also looking to expand its presence in the international market – with a focus on the Gulf Cooperation Council (GCC) countries.


“International business contributed as much as 18 per cent to the overall revenue of the company last year. This year, we expect it to contribute over 20 per cent to revenue,” said Ashvin Subramanyam, CEO, international business, Orkla India.


The company recorded a revenue of Rs 2,300 crore in 2023.

First Published: Sep 20 2024 | 9:03 PM IST



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Gold breaks ,600 barrier as Fed rate cut bets prolong historic run

Gold breaks $2,600 barrier as Fed rate cut bets prolong historic run

by | Sep 20, 2024 | Share Market


Gold | (Photo: Shutterstock)

2 min read Last Updated : Sep 20 2024 | 9:02 PM IST


Gold soared above the $2,600 level on Friday for the first time, extending a rally boosted by bets for further U.S. interest rate cuts, and rising tensions in the Middle East.


Spot gold was up 0.7 per cent at $2,605.50 per ounce by 10:05 a.m. ET (1405 GMT), while U.S. gold futures rose 0.6 per cent to $2,630.30. Silver gained 0.5 per cent to $30.93.


Bullion’s latest rally got a fillip after the Federal Reserve initiated an aggressive easing cycle on Wednesday with a half-percentage-point reduction, adding to the appeal for gold, which pays no interest.

 


Prices of the safe-haven asset have climbed 26 per cent in 2024, its biggest annual rise since 2010, as investors also sought to hedge uncertainties spurred by prolonged conflicts in the Middle East and elsewhere.


The record rally could be poised for a correction, analysts said.


“Clearly, there’s still some buying activity associated with the Fed’s decision to begin their easing cycle with a big cut,” said Daniel Ghali, commodity strategist at TD Securities.


However, “the source of this buying activity remains off our radar,” given ETF (exchange traded fund) inflows are relatively marginal and Asian buyers are still on a buyers’ strike, all signs of “extreme positioning,” Ghali added. [GOL/ETF]


The record rally has eroded retail demand in top consumers China and India. [GOL/AS]


It “should not go on forever,” Commerzbank said in a note, citing the expectation for rate cuts of only 25 basis points each at the Fed’s next two meetings.


Still, some analysts said gold could see more upward spikes.


“Geopolitical risks, such as ongoing conflicts in Gaza, Ukraine, and elsewhere, will ensure to sustain gold’s safe-haven demand,” Forex.com analyst Fawad Razaqzada said in a note.


Continued weakness in the dollar, which makes gold cheaper for holders of other currencies, offered additional tailwinds, analysts said. [USD/]


Elsewhere, Platinum fell 1.1 per cent to $974.76 and palladium shed 1.7 per cent to $1,062.25.


 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sep 20 2024 | 9:02 PM IST



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