ICICI Prudential Manufacturing in India Fund: NFO review

ICICI Prudential Mutual Fund has launched a thematic scheme called ICICI Prudential Manufacturing in India Fund. The open-ended scheme will invest in companies that are engaged in manufacturing. The New Fund Offer (NFO) would close for subscription on 5 October.

The scheme aims to capture the increasing contribution of share of manufacturing in India's GDP. The current share is 18 per cent, which is higher than the narrow range of 14-16 per cent seen over last four decades, according to CMIE.

The scheme will be managed by Anish Tawakley and Mittul Kalawadia. You can invest a minimum amount of Rs 5,000 (and, in multiple of Re 1 thereafter). The scheme is benchmarked to S&P BSE 500 Index.


Investors can invest in growth and dividend options under the scheme. Exit load is 1 per cent of the applicable NAV, if units are purchased or switched in from another scheme of the fund and redeemed or switched out within 18 months from the date of allotment.

According to Nimesh Shah, MD & CEO, ICICI Prudential Mutual Fund, “India is poised to emerge as a significant manufacturing hub in order to cater to rising domestic demand. Positive policy announcements by the government and well-designed development programmes in various sectors of manufacturing are likely to lead to further growth in coming years.” “This Scheme will broadly look at the manufacturing theme from three aspects namely Exports oriented manufacturing, domestic consumption and domestic capex manufacturing,” adds Shah.

Should you invest?
Mutual fund advisors generally don't advise investors to opt for new fund offers unless they are offering something unique. Advisors also believe that retail investors shouldn't take high exposure to any specific themes.

"See, manufacturing in India is a niche sector. It is risky to invest in such a small universe. Investors who want to play the theme should be well-versed with it. Such investments require awareness and information about the particular sector," says Neeraj Chauhan, Founder, The Financial Mall.

"The sector might perform well in the coming time, but retail investors can have that exposure in a diversified fund or a value fund. They don't need to take extra risk for this," says Chauhan.

Scheme at a glance:
Plans: Growth, Dividend
Benchmark: S&P BSE 500 TRI
Type: Open-ended
Minimum investment: Rs 5,000
Minimum additional investment (R) 1,000
Minimum SIP investment (R) 1,000
Minimum installments: 6
Exit Load: 1 per cent for redemption within 540 days