ICICI Prudential Mutual Fund has launched ICICI Prudential Transportation and Logistics Fund. It is an open-ended equity scheme that will invest in equity and equity-related securities of companies engaged in transportation and logistics.
In a statement, ICICI Prudential MF said the scheme may invest in sectors/stocks that form a part of Nifty Transportation and Logistics TRI which is also the benchmark of the offering. The scheme may follow a buy and hold approach and hence an investment horizon of minimum five years is recommended.
ICICI Prudential MF said the transportation and Logistics theme consists of industries broadly classified under three key sectors – Auto Original Equipment Manufacturers (OEMs), Auto Components (Ancillaries) and Logistics.
The Mutual Fund company further said that Nifty Transportation and Logistics Index performance offtake has just begun and is expected to continue its upward trajectory. Harish Bihani and Sharmilla D’Mello (for Overseas Investments) are the fund managers of this NFO.
Commenting on the NFO, Chintan Haria, Head – Product Development and Strategy, ICICI Prudential AMC said, “Transportation is an under-penetrated market in India. The new policy on logistics by the government underlines the key role played by the sector in the economic growth of the country. Formalization of the economy and positive correlation to GDP growth and the Government’s initiatives to reduce costs and improve efficiency, all stand to benefit the sector in the coming years. With muted performance in the last couple of years, we believe the theme is coming out of the woods and there are more legs to recovery.”
India’s logistics market is estimated at $216 billion out of which organized players contributed only ~3.5% ($6-7 Billion) in FY 2020. “We expect disruption in this segment and market share shift from unorganized to organized players as Indian e-commerce shipments growth plays out. Going forward, Government initiatives may lead to cost reduction and increase efficiency,” said Haria.
The NFO will open on October 06 and close on October 20, 2022.