ICICI Prudential Mutual Fund on Friday launched the ICICI Prudential Nifty Pharma Index Fund, an open-ended index scheme aimed at replicating the Nifty Pharma Index.
The fund is designed to reflect the performance of companies engaged in manufacturing pharmaceuticals and biotechnology products, the ICICI Prudential AMC said in a press release.
The new fund offer (NFO) will remain open for subscription from Nov 25 to Dec 9.
Exuding its confidence in the index, the fund house said the Nifty Pharma Index has grown by 9.52 per cent annually since October 2012.
Detailing the product, Chintan Haria, the head of product development & strategy, ICICI Prudential AMC, said: “Pharma sector in India continues to flourish on the back of health schemes introduced by the government, increase in exports and growing domestic demand. By investing in the fund, an investor gets to tap into the opportunities presented by the pharma sector.”
He said, “Greater awareness, changing attitude towards preventive healthcare, increased precedence of lifestyle diseases, and better access to insurance will likely boost the pharma industry further.”
India is the largest provider of generic drugs globally, and 70 per cent of the World Health Organisation’s vaccines are sourced from India. It is also home to the second-highest number of Food and Drug Administration (FDA) approved plants outside the US, and the third-largest industry worldwide, in terms of production volume, the fund house said, listing the positive factors helping the industry.
About The Fund
The scheme’s stock selection universe will be the Nifty 500, and no single stock shall be more than 33 per cent. The top three stocks will have a cumulative weightage of not more than 62 per cent at the rebalancing time. The index will be rebalanced semi-annually on January 31 and July 31.
The ICICI Prudential Nifty Pharma Index will include companies that are into generic drugs, OTC medicines, bulk drugs, vaccines, contract research and manufacturing, biosimilars, and biologics.
The fund house said, citing an example, that suppose you had invested Rs 1 lakh in the Nifty Pharma Index in 2012, it would have become Rs 2.48 lakh in October 2022.
Growth Drivers For The Sector:
• The fund house said the government’s US$ 4.83 billion allocation in the Union Budget 2022-23 for the National Health Mission is a major boost to the sector.
• India also offers quality services at marginal costs compared to the US, Europe, and South Asia.
• The country also has skilled drug manufacturing capability, from low-cost generic patented drugs to end-to-end manufacturing.
• Besides being home to one of the world’s largest national health protection schemes, India also has high domestic demand for health services.
• The government has also allowed up to 100 per cent and 74 per cent foreign direct investment (FDI) in Greenfield and Brownfield pharmaceuticals projects, respectively, through the automatic route.
• Between April 2000 and March 2022, India’s pharmaceuticals sector bagged FDIs worth US$19.41 billion, showing investors’ confidence in the industry.
