New Delhi: ICICI Prudential Mutual Fund has announced the launch of an open-ended index scheme replicating the Nifty Pharma Index. The index is designed to reflect the behavior and performance of companies that are engaged in the manufacturing of pharmaceuticals and biotechnology companies.
The New Fund Offer (NFO) for ICICI Prudential Nifty Pharma Index Fund will open on 25 November and close on 9 December.
The fund managers of this scheme will be Kayzad Eglim and Nishit Patel.
The index includes companies that are in generic drugs, over-the-counter (OTC) drugs, bulk drugs, vaccines, contract research and manufacturing, biosimilars, and biologics.
The universe for stock selection is Nifty 500 and no stock will exceed 33%. The weighting of the top three stocks at the time of rebalancing shall not exceed cumulatively 62%. The index will be rebalanced semi-annually on January 31 and July 31.
Since October 2012, the Nifty Pharma Index has gained 9.52% annually. For example, 1 lakh invested in Nifty Pharma index in 2012 would have been worth 2.48 lakh by the end of October 2022.
Speaking on the product launch, Chintan Haria, Head of Product Development and Strategy, ICICI Prudential AMC said, “The pharma sector in India continues to flourish due to health schemes launched by the government, growth in exports and rising domestic demand .. Going forward, greater awareness, changing attitudes towards preventive healthcare, increasing number of lifestyle diseases and better access to insurance are likely to further boost the pharma industry.”
According to the fund house, over the years, India has emerged as a pharmacy to the world by becoming the largest provider of generic drugs globally and exporting pharmaceuticals to over 200 countries. Also, 70% of World Health Organisation’s vaccines (as per the Essential Immunization Schedule) are sourced from India.
The fund house has listed out the factors working in favor of the pharma sector.
Government support: As per the Union Budget 2022-23, $4.83 billion has been allocated to the ‘National Health Mission’.
Medical Tourism: Quality services at a nominal cost as compared to America, Europe and South Asia.
Efficient drug manufacturing: End-to-end manufacturing of low cost generic patented drugs as well
High Domestic Demand: Launch of one of the largest National Health Protection Schemes globally.