Fund houses rush to launch Rajiv Gandhi Equity Scheme
Looking to increase penetration among retail investors, fund houses are rushing to launch Rajiv Gandhi Equity Savings Scheme, with six players including HDFC Mutual Fund filing draft papers for it with market regulator Sebi in less than two months.
RGESS, meant for first timers in the capital market, aims to attract more retail investors by offering tax benefits on their investments.
In January alone, besides country's largest fund house HDFC MF, four more players have filed draft documents for starting the scheme with the Securities and Exchange Board of India.
Other players are UTI AMC, LIC Nomura, IDBI Mutual Fund and SBI MF. In December, DSP BlackRock had filed draft paper for launching the scheme, according to Sebi data.
Filing draft papers is mandatory before launching new mutual fund schemes and the regulator usually takes about three-four weeks to clear them.
"RGESS is likely to help improve penetration of mutual funds among the retail investors in the country. This scheme will not only create awareness, but it also has the potential to channelise retail money to capital markets in an informed manner," ICICI Prudential AMC MD and CEO Nimesh Shah said.
Market participants believe that the government initiative is a positive step and help in attracting retail investors towards equity markets.
RGESS was announced in the 2012-13 Union Budget, and is another government initiative to strengthen the country's capital market with increased participation of retail investors.
"The scheme is only for the first time investors in the capital market and there is a huge potential in the country,"
