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Aditya Birla Sun Life Mutual Fund has launched Aditya Birla Sun Life PSU Equity Fund, an open-ended equity scheme which will invest predominantly in Public Sector Undertakings where the government (State or Central) is a majority shareholder with at least 51 per cent shareholding.
The minimum application amount for this fund is Rs 500 during the New Fund Offer period which closes on December 23.
A Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC said PSUs typically dominate sectors that are core to the economy and its growth such as utilities, oil and gas, metals and mining, infrastructure, defence, engineering and banking. Often, they have a monopolistic position or large scale, with strong Return on Equity (RoE) and steady cash flow from operations which allow them to give out high dividends, he said.
Government policies, reform plans and economic growth agenda will trigger the comeback for many of these companies going forward.
“Most PSUs are quality companies with strong balance sheets and a potential to get re-rated over a period of time. The Government’s increasing focus on strategic divestment plans will also help unlock value for some of the PSUs. This combined with the attractive valuations and their underlying intrinsic value make them a compelling investment choice, said Balasubramanian.
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