ICICI Prudential Mutual Fund launched ICICI Prudential Nifty Pharma Index Fund, which is an open-ended Index scheme replicating Nifty Pharma Index. The New Fund Offer (NFO) opened on November 25, 2022 and it will close on December 9, 2022.
“Pharma sector in India continues to flourish on the back of health schemes introduced by the government, increase in exports and growing domestic demand. Going forward, greater awareness, changing attitude towards preventive healthcare, increased precedence of lifestyle diseases and better access to insurance is likely to further boost the pharma industry. By investing in ICICI Prudential Nifty Pharma Index Fund, an investor gets to tap into the opportunities presented by the pharma sector,” Chintan Haria, Head- Product Development & Strategy, ICICI Prudential AMC said.
Nifty Pharma Index
The Nifty Pharma Index is designed to reflect the behaviour and performance of the companies that are engaged in the manufacturing of pharmaceutical and biotechnology companies.
The AMC said in a statement that the index includes companies which are into generic drugs, OTC medicines, bulk drugs, vaccines, contract research & manufacturing, biosimilars and biologics. The universe for stock selection is Nifty 500 and no single stock shall be more than 33%. Weights of the top three stocks cumulatively will not be more than 62% at the time of rebalancing. The index is rebalanced semi-annually on January 31st and July 31st.
The Nifty Pharma Index has grown at 9.52% annually since October 2012. For example, Rs.1,00,000 invested in the Nifty Pharma Index in 2012 would be worth Rs. 2,48,220 by end of October 2022, the AMC said.
Key Features of ICICI Prudential Nifty Pharma Index Fund
- Low cost of production and R&D boosts efficiency, leading to competitive exports.
- High economic growth along with increasing penetration of health insurance to push expenditure on healthcare and medicine
- Greater awareness, changing attitude towards preventive healthcare, increased precedence of lifestyle
diseases and better access to insurance will further boost the industry
- Up to 100% and 74% Foreign Direct Investment (FDI) allowed for Greenfield and Brownfield pharmaceuticals projects respectively through automatic route
- The Indian drugs and pharmaceuticals sector received cumulative FDIs worth US$ 19.41 billion between April 2000-March 2022 thus reflecting the confidence in the sector.
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The AMC said that over the years, India has emerged as a pharmacy to the world by being the largest provider of generic drugs globally and exporting pharmaceuticals to over 200+ countries. Also, 70% of the World Health Organisation’s vaccines (as per the essential Immunization schedule) are sourced from India.
India is also home to the second highest number of US FDA-approved plants outside the US and is the 3rd largest industry worldwide in terms of production by volume and 14th by value.