Sundaram Mutual looks to raise Rs 300-400 crore via NFO

Mumbai: Sundaram Mutual today said it is looking to raise around Rs 300-400 crore through its new open-ended equity scheme named Sundaram Services Fund, which will focus on the services sector.

The new fund offer (NFO) opened for the subscription today and will close on September 12. The scheme will reopen for ongoing subscription or redemption from September 26.

"Sundaram Services Fund targets to raise around Rs 300-400 crore and it will provide an opportunity to invest in a sector representing 54 per cent of the Indian economy, which also happens to be among the world's fastest growing at 7.6 per cent in 2018," Sundaram Mutual managing director Sunil Subramaniam told reporters here.

The gap between services share of the economy at 54 per cent and of the market capitalisation at only 35 per cent implies huge potential for the future, he added.

The NFO aims to invest between 80 and 100 per cent in predominantly equity and equity related instruments of the country's services sector.

Subramaniam said the fund managers' strategy will be to invest in a multi-cap portfolio of aggressive small caps, mid caps and defensive large caps, in existing listed universe of 193 stocks identified with market cap of Rs 40 lakh crore, and potential new listings in new-age services.

The new-age businesses have garnered private equity investments in excess of Rs 1.7 lakh crore over the last five years, he pointed out.

The fund will be managed by S. Krishna Kumar, CIO-Equity, as well as equity fund managers, Rahul Baijal and Rohit Seksaria. The performance of the scheme will be benchmarked against S&P BSE 200.

Sundaram Asset Management Company commenced business in 1996 and has an with assets under management of about Rs 37,477 crore as on July 31.