Mutual Funds
Pramerica Diversified Equity Fund: Nothing new to offer

The equity fund management of Pramerica Mutual Fund does not have a sufficiently long track record. With over 80 similar schemes available in the market, investors would probably invest in schemes that have an established track record

Pramerica Mutual Fund is planning to launch an equity diversified scheme—Pramerica Diversified Equity Fund. According to the offer document recently filed with the Securities and Exchange Board of India (SEBI), the scheme would invest over 65% of its assets in equities across all capitalisations. The remaining part of the portfolio will be kept in cash and debt instruments. This multi-cap scheme would benchmark its performance to the S&P BSE 100 Index. There are over 80 multi-cap schemes available for investment, the new scheme from Pramerica Mutual Fund would just add to the list.

At present, Pramerica Mutual Fund has only two other equity schemes—Pramerica Equity Fund and Pramerica Dynamic Fund. Both these schemes have a track record of less than three years. Pramerica Equity invests over 60% of its portfolio in large-cap stocks. Pramerica Dynamic, as the name suggests, varies its equity allocation from 30%-100% depending on a proprietary model based on the markets. Both the schemes combined have a corpus of just over Rs100 crore. Over the past one year, Pramerica Equity and Pramerica Dynamic have delivered a return of 5.05% and 6.54%, respectively. The S&P BSE Sensex delivered a return of 8.39% in this period.

The schemes of this fund house do not have a sufficient track record to judge the performance of the fund management. Lack of a performance track record does not give investors a good reason to invest. This can be seen by the poor response to the existing equity mutual fund schemes of Pramerica MF. As this scheme does not provide anything different from other schemes, an investor would opt for a scheme which has a proven track record.

The fund managers would have to perform well to attract investors. This scheme would be managed by Brahmaprakash Singh who has over 18 years in investment management and Mahendra Jajoo who has over 20 years of experience in financial services and capital markets. The expense ratio of the scheme would have a maximum limit of 2.50% which could go up by an additional 30 basis points depending on the inflows beyond the top 15 cities.


Other scheme details:

Initial Purchase: Minimum of Rs5,000 and in multiples of Re1 thereafter.

Additional Purchase: Minimum of Rs500 and in multiples of Re1 thereafter.

Exit Load:-

  • If units are redeemed/switched out on or before 30 days from the date of allotment - Nil;
  • If units are redeemed/switched out after 30 days, but on or before 395 days from the date of allotment - 1%;

If units are redeemed/switched out after 395 days from the date of allotment – Nil.


Supreme Court asks Sterlite Industries to pay Rs100 crore fine for pollution

Just last week, the Tamil Nadu Pollution Control Board ordered closure of Sterlite’s copper smelting plant at Tuticorin over alleged noxious gas leak. The apex court, however, refused to direct closure of the smelting unit and fined it Rs100 crore for polluting the environment

The Supreme Court on Tuesday asked UK-based Vedanta Group’s unit Sterlite Industries to pay Rs100 crore as compensation for polluting environment through its copper smelting plant in Tamil Nadu. The apex court, however, refused to direct closure of the smelting plant.
Last week, the Tamil Nadu Pollution Control Board (TNPCB) ordered closure of Sterlite’s copper smelter unit in Tuticorin following alleged noxious gas leak. The leak triggered protests with hundreds of people, including MDMK leader Vaiko and CPI leader Nallakkanu, being arrested on 28th March when they led a march to the unit demanding its closure.
In its order on Tuesday, the Supreme Court bench headed by justice AK Patnaik said that the environment has been polluted for a long time due to the discharge from the plant of the multinational company and it has to pay compensation.
Imposing the compensation on the company, the bench said, “Amount less than Rs100 crore would not have the desired impact and the compensation ‘must act as deterrent’.” 
The amount of compensation should be decided based on financial strength of the company, the bench noted. It, however, refused to direct closure of the plant, setting aside the Madras High Court's 2010 order on closing it down.
On Tuesday, Sterlite shares closed 3.8% up at Rs93.10 on the BSE, while the benchmark Sensex ended at 19,041.



Vinay Joshi

4 years ago

Still it's problems are not over. It has to battle the TN pollution control norms, which may be a hurdle.


Ambani brothers join hands for RJio’s 4G launch

Anil Ambani’s RCom owns a country-wide fibre optic network originally built by Mukesh Ambani, which would prove to be crucial for the upcoming 4G network of the elder sibling

Mukesh Ambani's Reliance Jio Infocomm (RJio) has signed a definitive agreement by paying Rs1,200 crore as a fee to Anil Ambani's Reliance Communications (RCom) for using its inter-city fibre optic network. The irony is, the senior sibling built the fibre optic network when Reliance was a single entity, and now he has to pay fee for using the same network because he has the license but no infrastructure for 4G. On the other hand, the younger brother has infrastructure, but no license for 4G.


As per the agreement, RJio would use RCom's multiple fibre pairs spread over 1.2 lakh km across the country for providing backbone to roll out its 4G services. “RCom will in turn have reciprocal access to optic fibre infrastructure to be built by RJio in the future,” RCom said in a release. RJio would pay about Rs1,200 crore to RCom as one time indefeasible right to use (IRU) fees for sharing the fibre optic network.


Telecom has always been a sector close to the heart of the Reliance Industries’ (RIL) chairman and managing director, Mukesh Ambani, who is known for his quick execution of mega projects, launched his ‘dream’ mobile services in 2003-04 with a slogan “Kar Lo Duniya Muththi Mein” (take control of the world). However, he had to give up Reliance Infocomm (which later became RCom) to Anil Ambani in 2005 when the Reliance empire was split.


Later in 2010, Mukesh Ambani-led RIL re-entered the telecom arena with a bang, announcing the acquisition of Infotel Broadband Services Pvt Ltd, which had emerged as the sole winner of pan-India broadband spectrum, for Rs4,800 crore.


Coming back to RCom, the company is striving hard to reduce the debt level in its books and has maintained its stance of selling stake in its tower assets, which might help in deleveraging the balance sheet and reducing debt. According to reports, RCom has debt of over Rs37,000 crore.


Last month, the Anil Ambani group company made yet another attempt to reduce its debt. In a regulatory filing, RCom, said it was in talks with Bahrain Telecommunications Co (Batelco) to sell stake in Reliance Globalcom, its enterprise business unit.


In 2012, RCom had also withdrawn its $1-billion initial public offering (IPO) plans for its submarine cable unit Flag Telecom, citing unfavourable market conditions.


Last year in June, Canadian research firm Veritas, in a report alleged that RCom was entering a phase of maximum uncertainty. The report further stated that fractured policy-making, high inflation, an uncontrollable fiscal deficit and the highly competitive telecommunications sector, were all working against RCom.



Suiketu Shah

4 years ago

The Ambani brothers are outstandingly remarkable.Doubt in my lifetime we wl see someone even close to them.Once their respective sons join their business in a few yrs,their companies shd be the greatest and richest in the world and no one wl be close.



Vinay Joshi

In Reply to Suiketu Shah 4 years ago

You will not know when the bubble will burst.


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