Mirae Asset Mutual Fund Gets SEBI Nod to Launch BSE India Defence ETF

Mumbai, Oct 15, 2025: Keeping in view of the expanding and flourishing Indian defence sector, Mirae Asset Mutual Fund has received the market regulator’s approval for the launch of Mirae Asset BSE India Defence ETF. It will be an open-ended exchange-traded fund that will track and replicate the BSE India Defence Total Return Index, which also serves as the benchmark for the fund. The scheme aims to generate returns based on the performance of the underlying index (subject to tracking error). There would not be any guaranteed returns.

The defence sector has grown at a consistent pace in the past couple of decades. With the entry of private firms, the growth expectations are around 16-18% for the sector (on the whole). Hence, it is an excellent opportunity to tap into the growth trend in the sector.

Mirae Asset Mutual Fund, part of Mirae Asset Financial Group, headquartered in Seoul, is among India’s leading fund houses with a diversified portfolio of equity, hybrid, and thematic ETFs. The fund house has been actively expanding its ETF lineup, targeting sectors such as manufacturing, PSU banks, EVs, and now, defence, aligning with India’s push for indigenous defence manufacturing.

Key Highlights

The fund’s NFO price will be 1/100th of the index value on the allotment date, with a minimum investment of ₹5,000. It will be listed on NSE and BSE and managed by Ekta Gala and Akshay Udeshi. The creation unit size is about 1 lakh units, with no exit load and a TER capped at 1%. Market makers include Mirae Asset Capital Markets, Kanjalochana Finserve, East India Securities, Parwati Capital, Vaibhav Stock & Derivatives Broking, and iRage Broking Services LLP.

Investment Strategy

The fund will invest around 95-100% of its assets into shares and stocks that constitute the underlying index. Any balance amount will be invested in money market instruments and tri-party REPOs. The fund will follow a passive investment strategy, mirroring the index constituents in the same proportion, to reduce tracking error. The scheme may also participate in stock lending (up to 20% of net assets) and derivatives (up to 20% of net assets for hedging).

Benchmark Composition

As per the BSE India Defence Index, top constituents include Bharat Electronics Ltd (15.87%), Hindustan Aeronautics Ltd (15.29%), Solar Industries India Ltd (11.91%), and Mazagon Dock Shipbuilders Ltd (6.98%), among others.

Top 10 Holdings (as Per Index Weight)

The top holdings include Bharat Electronics Ltd (15.87%) and Hindustan Aeronautics Ltd (15.29%), which together account for over 30% of the index weight, highlighting a strong focus on defence electronics and aerospace. Other major constituents include Solar Industries (11.91%), Mazagon Dock Shipbuilders (6.98%), and Mahindra & Mahindra (5.62%). The inclusion of L&T, Adani Enterprises, Bharat Dynamics, Cochin Shipyard, and Ashok Leyland further broadens exposure across engineering, shipbuilding, and defence manufacturing verticals.

Risk Profile and Liquidity

Given the nature of the sector, the scheme is categorised under ‘very high risk’ and is suitable for investors looking to capitalise on the expected growth in the Indian defence sector and who have a long-term outlook on the market. The units will be listed on both the BSE and NSE as it is an exchange-traded fund. The AMC has appointed multiple market makers to maintain two-way quotes for price stability.

Fund Management and Structure

The ETF will be managed jointly by Ms Ekta Gala, who manages several Mirae ETFs, including Nifty 50, Nifty Next 50, and BSE Select IPO ETFs, and Mr Akshay Udeshi, who co-manages a range of thematic and sectoral ETFs. The scheme seeks a minimum subscription of ₹5 crore during the NFO and will allot units within five business days from closure.

REF: https://www.sebi.gov.in/sebi_data/attachdocs/oct-2025/1760417169227.pdf

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