labels: prudential icici, investment - general
PruICICI reopens Floating Rate Plan for fresh subscriptionsnews
Our Markets Bureau
31 March 2003
Mumbai: PruICICI Floating Rate Plan has opened for fresh subscription on 31 March 2003 at a net asset value (NAV) of Rs 10.0028. It is an open-ended debt fund, targeted at investors with an uncertain view on interest rates and who would like to hedge their debt portfolios.

Also investors looking at steady returns without any market volatility can look at investing into this fund. The fund mobilised around Rs 510 crore from the initial public offering (IPO), which was for one day on 28 March 2003.

The fund has cumulative and dividend reinvestment options. The dividend frequency has been set at a fortnightly basis, which works out better from the tax angle, as the dividends are tax free in the hands of the investor.

Investors perceiving uncertainties in the debt markets and wanting to negate the volatilities (like the impact of the Iraq war) can look forward to the option of parking their funds in PruICICI Floating Rate Plan. Religious and charitable trusts are also eligible to invest in the plan under the provisions of 11(5) (xii) of the Income Tax Act, 1961.

Floating rate instruments, though in a nascent stage in India, are gaining ground and the trend indicates that there is an appetite for such products. In a floating rate instrument the interest rate is periodically reset based on a pre-specified benchmark rate, at pre-specified intervals. The reset intervals can be six months, three months, one month and even daily depending on the duration of the floater.

The spreads will be higher for longer-term interest rate, allowing the investor to earn higher carry. Floaters can be reset to a variety of rates and benchmarks. Due to the frequency of reset, floaters actually behave like money market instruments and have low duration.

The minimum application amount will be Rs 1 lakh and the minimum additional investment will be Rs 1,000. The cut-off time for subscription is 10.30 am and the cut-off time for redemption will be 12 noon. Investors will not have to bear any entry or exit load and the estimated recurring expenses are pegged at a mere 0.75 per cent.

Prudential ICICI Asset Management Company (PIAMC) is the investment manager to the largest private sector mutual fund in the country, the Prudential ICICI Mutual Fund. PIAMC enjoys the strong parentage of the ICICI group, a well-known and trusted name in financial services in India, and the Prudential group, one of Britain’s largest players in the insurance and fund management business.

PIAMC has over Rs 10,187.32 crore in assets under management (AUM) as of 28 February 2003 and has 26 branch centres all over India to service its over 5.5 lakh investors. Its diverse product portfolio comprises equity, debt and balanced funds.

 

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PruICICI reopens Floating Rate Plan for fresh subscriptions