ICICI Prudential Mutual Fund will open the new fund offer (NFO) of its Nifty Pharma ETF on October 12, with the subscription window closing on October 19.
The minimum application amount during the NFO is ₹1,000, with additional investments permitted in multiples of ₹1.
The open-ended exchange-traded fund (ETF) will track the Nifty Pharma Index, which measures the performance of pharmaceutical companies forming part of the index. The scheme will be managed by Nishit Patel, Ashwini Bharucha and Venus Ahuja, according to the fund house.
The ETF will provide investors with exposure to a basket of pharmaceutical stocks through a passive investment strategy that seeks to track the underlying index.
As an exchange-traded fund, its units are designed to be traded on stock exchanges, subject to the scheme’s listing and trading arrangements.
Chintan Haria, Principal – Investment Strategy at ICICI Prudential AMC, said India’s pharmaceutical industry was moving beyond generics towards complex generics, injectables, specialty medicines and biologics.
He also pointed to opportunities for Indian companies in contract development and manufacturing services (CDMO), as global pharmaceutical companies outsource more manufacturing and development work.
According to the fund house, India’s pharmaceutical market is valued at around $60 billion and is projected to reach $80 billion by 2031. The country is the world’s third-largest pharmaceutical producer by volume and supplies around 20% of global generic medicines by volume, it said, citing industry and government sources.
The sector’s growth drivers include domestic demand for medicines, exports, opportunities in specialty manufacturing and policy support for domestic production.
The fund house has also highlighted the potential of GLP-1 drugs used to treat obesity and diabetes as a developing opportunity for pharmaceutical manufacturers following the expiry of semaglutide’s patent protection in India.
However, the performance of the ETF will depend on the movement of the Nifty Pharma Index and the underlying stocks.
Since the scheme focuses on a single sector, it carries sector-concentration risk and may be more volatile than diversified equity funds. Index performance does not guarantee similar returns from the scheme, and investors will also need to account for applicable expenses and trading costs.
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Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.