ITI Bharat Consumption Fund NFO: Key Details You Should Know

ITI Mutual Fund has announced the launch of the ITI Bharat Consumption Fund, an open-ended equity scheme that invests in companies benefiting from India’s growing consumption demand. The fund’s New Fund Offer (NFO) will be open from February 6, 2025 to February 20, 2025.

Fund Objective

The primary objective of the ITI Bharat Consumption Fund is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies operating in consumption-related industries.

Investment Strategy & Portfolio Construction

The ITI Bharat Consumption Fund is market-cap agnostic, meaning it does not limit itself to large, mid, or small-cap stocks. Instead, it follows a mix of top-down and bottom-up stock selection strategies.

The portfolio is structured into three major categories:

1. Established and Robust Businesses (30-40% allocation)
   • Companies with strong distribution networks, high return on equity (ROE), and predictable cash flows.
2. Emerging Trends (30-40% allocation)
   • Businesses experiencing rapid growth, benefiting from rising income levels and a shift towards the organised sector.
3. High Growth Potential and Disruptive Models (20-30% allocation)
   • New-age business models that have the potential to disrupt existing consumption patterns.

Key Features of the ITI Bharat Consumption Fund

Fund Details

• Type of Scheme: Open-ended equity scheme following the consumption theme.
• Benchmark Index: Nifty India Consumption TRI
• Fund Managers:
  • Rohan Korde – Fund Manager (Equity)
  • Dhimant Shah – Senior Fund Manager (Equity)
  • Rajesh Bhatia – Oversees the overseas portion of the scheme

Investment Details

• Minimum Lumpsum Investment: ₹5,000 and multiples of ₹1 thereafter.
• Systematic Investment Plan (SIP): Starts from ₹500 per month.
• Exit Load:
  • 0.50% if redeemed/switched out within 3 months of allotment.
  • Nil if redeemed/switched out after 3 months.

Why Focus on Consumption?

India’s Rising Per Capita Income

With India’s per capita income projected to increase from USD 2,000 to over USD 7,500 by 2040, discretionary spending is expected to grow significantly.

Changing Consumer Preferences

Consumers across different generations are shifting spending patterns:

• Millennials and Gen Z prefer online shopping, premium brands, travel, OTT subscriptions, and convenience-driven purchases.
• Urbanisation and nuclear families are boosting demand for household appliances, food delivery, and wellness products.

Industry Diversification Beyond FMCG

While Fast Moving Consumer Goods (FMCG) remains a significant part of consumption, the fund will also invest in:

• Consumer Durables – Electronics, white goods, and luxury products.
• Automobiles – Cars, 2-wheelers, and electric vehicles (EVs).
• Healthcare & Wellness – Hospitals, pharmaceuticals, and diagnostic services.
• Telecom & Digital Services – Internet providers, e-commerce, and entertainment platforms.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.