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Mr T.P. Raman, Managing Director, Sundaram Mutual Fund, at the launch of Sundaram CAPEX Opportunities Fund in Chennai on Wednesday - Bijoy Ghosh

Chennai , Aug 10

SUNDARAM Mutual Fund today announced the launch of another fund, which it calls Sundaram CAPEX Opportunities Fund. The fund will invest in companies that supply equipment and material to companies that are expanding their capacity.

"For example, if NTPC announces a new power project, we will buy into BHEL," Mr Sanjay Santhanam, CEO, Sundaram Mutual, said at a press conference here today.

He said that Sundaram Mutual had identified about 390 companies with combined sales of Rs 1.4 lakh crore to invest. "A lot of them are old and known names," he said.

Illustrating the theme further, a press release from the company observes, "It is better to buy a company that supplies spanners to the mining industry, rather than the mining company."

Sundaram Mutual's Managing Director, Mr T.P. Raman, noted that capacity expansion worth about Rs 10 lakh crore was going on in India - the "work in progress" in expansion, including road building. The companies that supply equipment and material for capacity expansion have done well in the markets, other officials of Sundaram Mutual noted.

Asked if it was not true that most of the companies that Sundaram Mutual had identified were good companies, whose earnings the market would have already discounted, Mr Raman said, "I don't know, but the reality is that they are good companies with sustainable profitability."

Asked how much the company hoped to collect through the `new fund offer' (that opened for subscription today), Mr Raman said he did not want to make a guess but said that Rs 600 crore-Rs 700 crore might be a "good ballpark."

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