NFO Update: Baroda BNP Paribas Mutual Fund launches a services fund

Baroda BNP Paribas Mutual Fund has announced the launch of Baroda BNP Paribas Services Fund, an open-ended thematic equity scheme that aims to help investors participate in the long-term growth of India's rapidly expanding services economy.

The new fund offer (NFO) is open for subscription and will close on July 28. During the NFO period, investors can subscribe to units of the scheme at the face value of Rs 10 each.

According to a press release by the fund house, India's services sector has emerged as the country's largest engine of economic growth, consistently outperforming both manufacturing and agriculture in its contribution to Gross Value Added (GVA).


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“Driven by digitalisation, rising disposable incomes, financial inclusion, healthcare demand and expanding consumer spending, the services economy is expected to remain a key pillar of India's long-term growth,” said Sanjay Grover, Managing Director, Baroda BNP Paribas Asset Management (India).

The launch of the Baroda BNP Paribas Services Fund is also aligned with the Union Budget 2026–27, which outlines an ambitious vision of positioning India as a global services powerhouse with a 10% share of global services exports by 2047, the fund house said.

"India's digital transformation is creating a multi-decade opportunity for service-oriented businesses. Massive internet adoption has made India one of the world's largest connected populations. This digital infrastructure is enabling the next phase of service-sector growth," added Grover.

Unlike a single-sector fund, the Baroda BNP Paribas Services Fund will invest across multiple service-oriented industries, creating a diversified portfolio positioned to benefit from India's evolving economy.

The fund's investment universe includes approximately 195 service-sector companies within the Nifty 500 Index, spanning large-cap, mid-cap and small-cap companies. The key sectors include Banking and Financial Services (BFSI), Information Technology (IT) and IT-enabled Services (ITeS), telecommunications, healthcare, diversified retail, e-commerce, digital infrastructure and other service-oriented businesses.

The investment strategy seeks to identify companies with durable business models, scalable growth opportunities and strong earnings potential across market cycles.

"Even in a growing economy like India, a services fund focuses on historically high-growth sectors such as Banking & Financial Services (BFSI), IT, Healthcare and Digital Infrastructure. These sectors typically see profit pools and GDP contributions compound rapidly as per capita income rises, thereby outperforming the traditional manufacturing and non-service sectors,” said Rohan Korde, Fund Manager.

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The Baroda BNP Paribas Services Fund is intended for investors with an investment horizon of more than three years who are seeking to participate in India's structural growth story through a professionally managed thematic portfolio.

By investing across multiple segments of the services economy rather than a single industry, the fund seeks to combine the growth potential of thematic investing with the benefits of diversification. “As India's economy becomes increasingly driven by technology, finance, healthcare, communications and consumer services, the fund aims to provide investors with a focused opportunity to participate in businesses that are expected to shape the country's next phase of economic growth”, added Korde.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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