UTI Mutual Fund aims to raise Rs 500 cr via new equity fund scheme

Expects new fund to take advantage of a cycle of high returns expected to begin from the ongoing bull run

UTI Mutual Fund has proposed to launch a close ended Equity scheme ‘UTI-Focussed Equity Fund-Series I’. The new fund offer will open for subscription on August 13 and will close on August 27, 2014.  UTI Mutual Fund aims to raise up Rs  500 crore from this fund.  

“We are targeting Rs  500 crore from the issue. The new fund was timed to take advantage of a cycle of high returns expected to begin from the ongoing bull run in the Indian equity markets. The current market conditions that suggest some stocks can still offer handsome gains in coming years going by a positive operating cash flows and net profits of over Rs  50 crore. With moderation in inflation and interest rates, UTI MF expects the EBITDA margins to improve significantly in the coming years as the present margin at a little over 16 per cent was lower than the long-term average of 18 per cent,” said Debashish Mohanti, country head,-retail and executive vice president, UTI Mutual Fund in Pune today.  

Anoop Bhaskar and Lalit Nambiar are the fund managers of the scheme.

The minimum amount of investment is fixed at Rs  5,000 and in multiples of Re 1 thereafter. And the scheme will be listed on the NSE.

He added, “Most of the key drivers of growth are turning positive to push the demand while the new fund will choose the equity of companies that are well positioned to increase their bottom-line including those of the cyclical sectors during this period. The corporates are expected to see double digit earnings growth in coming 2-3 years.”

According UTI, the primary objective of the scheme is to generate long-term capital appreciation by investing predominantly in equity and equity related securities of listed companies.

The scheme will normally hold up to 30 stocks in the portfolio. The scheme does not guarantee any returns.

The scheme does not have an entry load and even UTI will not charge an exit load for redemptions made on maturity date.

The UTI asset management company, which has 9.53 million investor accounts under its 121 domestic schemes.

UTI Mutual Fund had last launched an equity fund (UTI Wealth Builder) in 2008.