SBI Mutual Fund is looking to raise ₹1,000 crore through its three-year close-ended new equity fund offering, SBI Equity Opportunities Fund — Series I.

Over 80% in equity The fund, which will be open for subscription between September 11 and 25, will invest 80-100 per cent of the total asset in equity and equity-related instruments and 20 per cent in debt and money market. It would have about 40 stocks under its portfolio.

Dinesh Khara, Managing Director, SBI MF, said the fund house would target to garner 50-60 per cent of the fund to be raised from beyond the top 15 cities.

“Since the start of this year we added many new branches in Tier-II and Tier-III cities and hope to attract a number of first-time investors through these centres,” he said. SBI MF last launched a pure play close-ended equity scheme in 2010. The close-ended nature of the scheme allows the fund manager far more flexibility to create a long-term portfolio with ability to tap the potential opportunities from structural trends, such as home improvement, e-commerce, import substitution, manufacturing, exports, defence and education, said Khara.

Justifying the timing of the fund offer, Dharmendra Grover, manager of the fund-on-offer, said despite the sharp run-up in the equity market, earnings growth have remained muted and was concentrated in few sectors.

“We believe inflation will moderate leading to a cut in lending rates in the coming days. This would kick-start a new broad-based cycle of better corporate earnings,” he said.

For instance, Japan’s investment in India peaked to $12 billion in 2007 and plunged to the current level of $4-5 billion. The positive vibes after the recent Prime Minister’s visit to Japan would lead to fresh fund flows, he said.

Navneet Munot, Chief Investment Officer, SBI MF, said the market is very similar to the bull phase witnessed between 2003 and 2008 and this time around it may prolong for a longer period since the micro economic challenges are behind us.

“Over a period of time, specialty chemical industry is likely to do what pharma has done to exports from India. The combination of innovation and cost control would make India a specialty chemicals hub,” he said.

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