Aditya Birla Sun Life Mutual Fund has launched Aditya Birla Sun Life PSU Equity Fund. It is an open-ended equity scheme that will invest majorly in Public Sector Undertakings where the government -Central or State – has at least 51 per cent shareholding.
The minimum application amount required for the fund is Rs. 500 during the New Fund Offer period which will close on December 23.
The key sectors of the Indian economy dominated by PSUs would grow in the coming days, particularly those industries where up a new business unit requires huge capital, regulatory clearances and/or expertise. Government policies, reform plans and economic growth agenda will trigger the comeback for many of these companies going forward.
“PSUs typically dominate sectors that are core to the economy and its growth such as Utilities, Oil & Gas, Metals & Mining, Infrastructure, Defence, Engineering, Banking etc. 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. Many of these have characteristics of blue chips in their respective industries,” said A Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC
“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 makes them a compelling investment choice,” he added.