Mutual Funds
Canara Robeco Agribusiness Fund: A sector fraught with issues

The new scheme from Canara Robeco will invest in companies linked to the Indian agribusiness sector. This sector may look attractive, but what are the risks?

Canara Robeco Mutual Fund recently filed an offer document with the Securities and Exchange Board of India (SEB) to launch an open-ended equity scheme—Canara Robeco Agribusiness Fund. As the name suggests, the scheme would invest over 65% of its portfolio in a diversified stock portfolio of companies focusing on food & agricultural space. The remaining part of the portfolio would be invested in other equities and/or domestic debt & money market instruments. There are a couple of mutual fund schemes which invest in global agribusiness funds. Prior to their launch we had mentioned that for these schemes to succeed human ingenuity would have to fail (Read: Flavour of the Season). The reason being if increasing population and higher income can cause resources to become scarcer, leading to an increase in prices, solutions are eventually found to increase the supply, and therefore prices may again fall. In the Indian context, the sector faces many issues.
According to the scheme’s offer document, the companies of the food and agriculture space would include those “which are engaged in any of the areas of the food and agriculture value chain. For the food and agriculture value chain a farm-to-fork approach is being used and therefore involves production, processing and distribution, next to supporting industries and service providers.” The fund house sees opportunities due to the developing nature of the Indian agribusiness sector for small- medium sized companies today (which are likely to have the potential to grow in the coming years). India is said to have a larger area of cultivable land than China but produces 30% less. According to a research report from BAIF Development Research Foundation, out of 147 million hectare area (MHA) of cultivable land in the country, only 44 MHA are under irrigation and the rest of the area is dependent on erratic rainfall for crop production. As agriculture in low rainfall regions is risky, farmers are hesitant to invest in external inputs to optimise their crop production and thereby incur low yields. The yields of Indian agriculture are well below global benchmarks. The erratic production and low yields could cause a huge fluctuation in the market prices which would impact the financials of a company.
Though the scheme may have an attractive theme, the agribusiness would need a lot of improvement in India. One would need to look at its portfolio before investing in the scheme. The scheme would benchmark its performance to the S&P BSE 500 and would be managed by Ravi Gopalakrishnan, head–equities, who has over 13 years’ experience. Other schemes of Canara Robeco have done reasonably well compared to their benchmarks in the past few years. 

Other details of the scheme
Lump sum Investment
Minimum amount: Rs5,000.00 and multiples of Re1 thereafter.
Subsequent purchases: Minimum amount of Rs1,000.00 and multiples of Re1 thereafter.
Systematic Investment Plan (SIP)
Minimum instalment amount:  Rs1,000.00 and Rs2,000.00 respectively for monthly and quarterly frequency respectively and in multiples of Re1 thereafter.
Exit Load
The exit load would be 1% for all amounts if redeemed / switched-out within one year from the date of allotment.
Expense Ratio
Maximum total expense ratio (TER) permissible under Regulation 52 (6) (c) (i) and (6) (a): Up to 2.50%

Additional expenses under regulation 52 (6A) (c): Up to 0.20%

Additional expenses for gross new inflows from specified cities: Up to 0.30%



Ramesh Poapt

4 years ago

This may not be a promising idea as CRMF thinks. Its not may avoid this..

Implement penalty points and graded punishment to reduce traffic violations in two years, says HPC

For better enforcement of traffic violations, the High Powered Committee has given the Transport Department and Transport Commissioner two years’ time to implement and enforce the suggestions given by it as well as the Sundar Committee Report

A High Powered Committee (HPC) set up by the home ministry following directions from the Bombay High Court has suggested a system of penalty points and graded punishment to ensure minimum traffic violations.  The Department of Transport and the Transport Commissioner have been assigned to ensure that all the recommendations by the HPC are implemented within two years.

The National Informatics Center is reportedly considering these viewpoints as well as the points raised by the Sundar Committee report. The Sundar Committee report had made several suggestions, most notably creation of dedicated highway police as well as formation of committees and advisories as well as autonomy to states to their own traffic management boards and such. It is also being suggested that road space be optimized to ensure steady traffic flow, as lack of space is one of the biggest constraints of Mumbai and have made life difficult.

Encroachment is another aspect that is being looked at very seriously and the police have already taken some action. The report noted, “Encroachment of pavements and carriageways by people and vehicles in Mumbai is one of the biggest concerns and has adversely impacted traffic conditions to a great extent.” According to the committee report, the encroachment on 20 roads has been removed in first phase, while 125 roads are taken up in Phase-II.

Illegal parking is another annoying thing that takes up road space. Often, you would see bikes parked outside restaurants undertaking home delivery, even though the space does not belong to them. The HPC noted in its report, “Additionally due to lack of effective parking policy and enforcement, it gives the citizens a feeling that parking is virtually free on the roads during the day and night.”

Besides enforcement of rules, there were other considerations such as public space, public transportation (including Mumbai rail network and BEST bus system) and so on which do not fall within the police jurisdiction. Therefore, the HPC was created to ensure stakeholders collaborate and work together.

While it is not known in what exact form penalty points and gradation of punishment will look like, it will hopefully lead to less traffic problems due to more clarity, because at the moment, there is no clear system of punishment for violations.

Earlier, a public interest litigation was initiated by the Bombay Bar Association against the State of Maharashtra & others to improve the traffic situation in and around Mumbai to make life for her citizens easier since the matter was too complex to be handled by the police force alone. Over the past few years, Mumbai’s public infrastructure, most notably roads and commute has gone from bad to worse. Increases in bus fares have already taken a toll on the marginal fringe workers.



Sachin Purohit

4 years ago

Roadside encroachment is not restricted to just hawkers, illegal parking, etc. Even more serious form of encroachment is roadside temples where there should have been a footpath. There probably are more roadside temples than traffic cops. And then there are pandals erected blocking entire roads not just during Ganesh Chaturthi and Navratri but also for some residential complex's private celebration. Not sure how they get permissions for blocking the traffic.

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