Nippon India Mutual Fund Debuts Index Scheme Riding on Manufacturing Momentum

Mumbai, July 18, 2025: Nippon India Mutual Fund has launched the Nippon India Nifty India Manufacturing Index Fund, an open-ended index fund designed to provide investors with focused exposure to India’s growing manufacturing sector. The scheme will track the Nifty India Manufacturing TRI, aiming to replicate its performance before expenses. This new offering is fully compliant with the SEBI (Mutual Funds) Regulations, 1996, and adheres to the provisions outlined in SEBI’s latest master circular dated 27 June 2024.

New Fund Offer Details

• Scheme Name: Nippon India Nifty India Manufacturing Index Fund
• NFO Price: ₹10 per unit
• Fund Category: Index Fund
• Benchmark: Nifty India Manufacturing TRI
• Fund Manager: Mr. Jitendra Tolani
• Exit Load: NIL
• Minimum Investment: ₹1,000 and in multiples of ₹1 thereafter

Key Investment Objective

The primary objective of the fund is to closely replicate the performance of the Nifty India Manufacturing Index, delivering returns that mirror its total returns, before accounting for expenses. To achieve this, the fund’s portfolio will primarily consist of equity and equity-related instruments of manufacturing companies, held in the same proportion as their representation in the underlying index. A minimum of 95% of the fund’s assets will be invested in these index securities, ensuring high correlation with the benchmark.

Allocation and Strategy Snapshot

To minimise tracking error, the fund may temporarily utilise equity derivatives, with exposure capped at 20% of the total equity portfolio assets. Additionally, securities lending activities will be undertaken, with exposure limited to 15% of net assets and 5% per counterparty, further aiming to enhance returns while managing risk.

SEBI-Aligned Expense Structure

In line with Regulation 52(6)(b) of SEBI regulations, the total expense ratio for the fund is capped at 1.00% of daily net assets. An additional allowance of 0.30% for investments from B-30 cities is currently suspended. Notably, no investment management fees will be charged on sponsor contributions, and the fund has waived all exit loads, making it potentially more attractive for investors.

SEBI Compliance & Governance Highlights

• Tracking Error Limit: The fund aims to maintain a tracking error of ≤2% per annum under normal market conditions, ensuring its performance closely mirrors the index.
• NAV Disclosure: The Net Asset Value (NAV) will be disclosed daily by 11:00 p.m. on both the AMC (Asset Management Company) and AMFI (Association of Mutual Funds in India) websites.
• Redemption Timeline: Redemptions will be processed within T+3 days, while Income Distribution cum Capital Withdrawal (IDCW) payouts will occur within T+7 days.
• Investment Restrictions: The fund will not invest in securitised debt, overseas securities, Additional Tier 1 (AT1) / Additional Tier 2 (AT2) bonds, Funds of Funds (FoFs), Real Estate Investment Trusts (REITs), or Infrastructure Investment Trusts (InvITs).
• Derivatives Use: The use of derivatives is strictly permitted for hedging purposes or portfolio rebalancing only, in adherence to SEBI norms.
• Regulatory Reference: The scheme is compliant with Clauses 12.24, 12.25, 6.10, and 1.14.1.2(b) of SEBI’s Master Circular dated 27 June 2024.

Index Composition: Top Constituents

As of 30 June 2025, the Nifty India Manufacturing Index comprises 76 stocks, spanning diverse sectors such as automobiles, capital goods, steel, and pharmaceuticals. The top five constituents by weightage are:

The index also mandates a minimum 20% weight allocation to both the Automobiles & Auto Components and Capital Goods sectors, ensuring significant exposure to these key manufacturing segments. Furthermore, no single stock is permitted to exceed a 5% weight within the index, promoting diversification within the manufacturing theme.

Special Facilities During NFO and Ongoing Basis

Investors can avail several convenient facilities, both during the New Fund Offer (NFO) period and on an ongoing basis:

• Auto-Switch from Debt/Liquid Funds: Allows for seamless transition of investments.
• ASBA Facility for NFO Applications: Facilitates application through blocked amounts in bank accounts.
• Online Transactions: Available via the Nippon India Mutual Fund website and mobile app.
• Systematic Investment Plan (SIP), Systematic Transfer Plan (STP), Systematic Withdrawal Plan (SWP), Trigger, and Smart Step Facilities: Offer flexible investment and withdrawal options.
• ETF-to-Index Fund Switch Facility: Provides a basket-based switching option for investors holding relevant ETFs.

AMC Due Diligence Declaration

Nippon Life India Asset Management Ltd has affirmed that all disclosures related to this fund comply with SEBI (Mutual Funds) Regulations and have been thoroughly verified for factual accuracy. The fund has been confirmed as a genuinely new product offering, not a modified version of any existing scheme.

What’s Next?

The fund is poised to benefit from India’s strong manufacturing push under initiatives like Make in India and the Production Linked Incentive (PLI) schemes. With no exit load, low expense ratio, and sector-focused diversification, it aims to attract investors seeking passive exposure to industrial growth. Post-NFO, its performance will depend on the underlying index’s trajectory and how well tracking error is managed. Investors should watch for early NAV trends, AUM buildup, and broader market sentiment toward the manufacturing sector. Long-term viability hinges on India’s continued capex momentum and policy support.

About Nippon India Mutual Fund

Nippon India Mutual Fund is one of India’s largest AMCs, offering a diversified range of equity, debt, hybrid, ETF, and index schemes. The AMC is listed and regulated under SEBI norms and holds a significant presence across retail and institutional investor segments.

For further information, investors may visit: mf.nipponindiaim.com

REF: https://www.sebi.gov.in/filings/mutual-funds/jul-2025/nippon-india-nifty-india-manufacturing-index-fund_95374.html

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