HDFC Manufacturing NFO Allotment Date, Risks, NAV & more

NFO Alert! HDFC has launched an all-new NFO Offer for its HDFC Manufacturing Fund. The fund opening date started from 26th April onwards and the new HDFC NFO fund will be closing on May 10, 2024. Moreover, the benchmark for the fund is going to be the Nifty India Manufacturing Index which has given returns of about 52% since it started (8092 points in the year 2022 to 12334 points in the year 2024). In this article, we are going to be sharing all the details about the upcoming HDFC Manufacturing New Fund Offer, its allotment date, opening & closing date, investment needed and more

The HDFC Manufacturing Fund is an upcoming NFO (New Fund Offer) by HDFC Asset Management Company. In a discussion about the fund, Mr. Rakesh Sethi, the fund manager of HDFC Manufacturing Fund said, “80% of the portfolio would be invested in stocks represented in a much diverse manner exposed to the theme of manufacturing.”

Speaking about the stock selection strategy, he mentioned “The stock selection process is going to be the bottom-up basis. It’s not like we are deciding on a top-down basis look these are the sectors that are growing. It's the other way round because we have a very strong research team.”

What is a bottom-up approach in stock selection?

It’s an approach of selecting stocks based on their micro-level performance (company’s individual performance). On the other hand, a top-down approach is based on the macro-level (sector performance, country’s economy, etc)

Data Source: HDFC Mutual Fund, 2024

The HDFC Manufacturing Fund manager, Mr. Rakesh Sethia said that the company may also invest in companies with less than 1000Cr market cap depending on other factors. The above table represents how big the manufacturing companies sector in India is only to give investors a general understanding. Notably, he also confirmed that the fund would be investing across all three categories, large-cap, mid-cap and small-cap.

Also Read: Some monopoly stocks, do u own any?

So these were the complete details of the HDFC Manufacturing Fund NFO offer, allotment date, opening date, closing date and minimum investment amount.

If we look at the performance of the benchmark index of the new HDFC NFO, it has only grown in the last few years. Here’s a look at it:

The image represents data from the Nifty India Manufacturing Index

As you can see in the above image, the Nifty India Manufacturing Index has given a handsome return of over 50% in the last 2.5 years (8092 points in the year 2022 to 12334 points in the year 2024).

Upon asking the question of why India needs to focus on manufacturing in its “Amrit Kaal,” the fund manager of the HDFC Manufacturing Fund explained the three key factors behind it:

1. Holistic & inclusive growth: India’s current contribution to global GDP is about 15% which is expected to grow to 20%

2. Large-scale employment generation: India has about 45% population working on farms which if moved to manufacturing factories can produce a lot of microeconomic stability

3. Macroeconomic stability: Our growing economy & net consumption can put us at risk of geopolitical instability (high dependence on other countries). However, having a current account balance with the help of manufacturing GDP can help us lower inflation & lower currency depreciation.

These factors do make sense and subsequently, the current business environment in the country also seems favourable. India’s GDP is expected to grow strong at 6.5% in FY25. With GDP growth, the manufacturing sector is also expected to double if not triple its market value. If these factors are leading you to wonder if should you invest in the HDFC Manufacturing NFO fund or not, don’t worry you aren’t the only one having that question.

Whether the HDFC Manufacturing NFO is good to invest in or not is up to you to decide. But we all know before investing, it's always best to consider both the pros and cons. So while we had a look at HDFC Manufacturing NFO pros, let's now have a look at some negatives or risks in HDFC Manufacturing NFO mutual fund.

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Below are some of the disadvantages or negatives of the HDFC Manufacturing NFO fund:

• Slowdown in domestic and/or global growth could impact revenue and profit growth

• Pace of reforms and implementation of policy initiatives could slow down or turn adverse

• Geopolitical developments impacting the availability of raw materials

• Impact of Automation and AI

• Risks around meeting ESG requirements

The Net Asset Value or NAV of the HDFC New Fund Offer (Manufacturing Fund) is not yet available as the newly launched fund still awaits its allotment date. Keep in mind, as we explained in our article, SBI Energy Opportunities New Fund Offer!, the NAV of a new fund is automatically set to Rs.10 until the fund allotment date. Hence as of April 29th today, the NAV of HDFC Manufacturing NFO (New Fund Offer) is Rs.10 per unit.

On a side note, the SBI Energy Opportunities New Fund Offer garnered a strong response from investors across the nation and collected over 6700 Crores

To invest in HDFC Manufacturing New Fund Offer, you can either invest directly via the HDFC official website as well as through discount brokers like Zerodha, Upstox, Groww, and Angel One or full-service brokers including Motilal Oswal, ICICI Direct, Kotak Securities, and Sharekhan.

There are both investment plans, Direct & Regular Plans. Investors can choose anyone based on their preference. The minimum investment is Rs.100 for both SIP and One-time payments.

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So this was all about sharing some key details of the HDFC Manufacturing Fund NFO (New Fund Offer). Our take on the pros and cons of the HDFC Manufacturing fund as well as its allotment date, opening date, NAV, and more.