Mahindra Mutual Fund launches ‘Mahindra Rural Bharat and Consumption Yojana’

Ahmedabad: Mahindra Mutual Fund, a wholly owned subsidiary of Mahindra and Mahindra Financial Services Limited (MMFSL) is going to launch a new open ended equity scheme ‘Mahindra Rural Bharat and Consumption Yojana,’ on October 19. The new fund offer will cloe on November 2 this year. The scheme will reopen for continuous sale and repurchase within 5 business days from the date of allotment.

The scheme is for investors who are seeking long-term capital appreciation by investing predominantly in equity and equity related instruments of entities engaged in and/ or expected to benefit from the high growth of Income & Consumption in rural India.

Jatinder Pal Singh, CMO, Mahindra Mutual Fund, “The scheme would endeavor to generate capital appreciation by investing in entities and businesses that are engaged in and are expected to benefit from the structural shift and growth in Rural India. This would include several sectors that are likely to benefit consistently due to improvement in income & Consumption of rural India. Various structural reform initiatives such as the soil card, crop insurance, higher MSP, e-Mandi and Doubling of farm Income have the effect of sharply increasing rural disposable income.”

Ashutosh Bishnoi, MD & CEO, Mahindra Mutual Fund said, “We expect India’s higher GDP growth to be contributed by positive demographic dividend and improvement in consumption pattern from Rural India. ‘Mahindra Rural Bharat and Consumption Yojana’ provides investors an opportunity to participate in India growth story predominantly in Rural India by investing in well diversified equity portfolio of fundamentally strong, and well-known companies. We believe the scheme offers an attractive long-term investment opportunity, hence, investors seeking higher capital appreciation from their investment should consider participating in Mahindra Rural Bharat Yojana.”

He added, “Mahindra Finance is rural oriented. Purchasing power in rural India is increasing. Mahindra Finance offers loan in over 3,25,000 villages. Rural population as well as demand is increasing. Farm income and non-farm income is growing. 47% of GDP is contributed by rural economy. It means 67% of population contributes 47% of GDP. Figures show 68% income in rural India is sourced by non-farm activities, such as government schemes of employment, oil mills, daal mills, live stock, dairy, jobs, government employment schemes, crop insurance scheme, 1,10,000 crore government push in irrigation etc. Rural India is no more just dependent on monsoon. All governments are giving priority to rural sector.”

He said, “consumption in rural India is very fast because income is steady. Purchasing power and preferences in rural and urban India are similar. While in 1994 65% of rural India income was spent on food purchase, the figure has as per latest figures come down to 45%. They have investable income. Even in 2013-14 when two monsoons had failed and recovery was slower, there was no cash crunch in rural India but they were spending carefully. We studied BSE200 for FY15-FY18 and excluded urban sector companies such as pharma, oil&gas, metal, corporate bank etc. We found that COGR earning of non-urban sector companies was three times compared to BSE200.”

In reply to questions he said, total customers of Mahindra AMC are 1.3 lakh. The company is trying to add more than 25,000 to across over 350 places. He said the company will make rural index.

Venkataraman Balasubramanian, Chief Equity Strategist, said “Mahindra Mutual Fund Mahindra Rural Bharat and Consumption Yojana would provide investors an opportunity to invest in a segment with strongest contribution potential to India’s growing GDP. The fund will focus on segments insulated from global volatility such as currency movements, etc and invest in companies that can capture the under-penetration opportunity in Rural India.”

The scheme would invest minimum 80% in equity and equity related instruments of entities having exposure towards rural India, and upto 20% in equity and equity related instruments of entities other than having exposure to rural India. The scheme would invest upto 20% in debt and money market securities, and upto 10% in units issued by REITs & InvITs.

DeshGujarat