New listed investment company (LIC), India Fund Limited, has opened its IPO to raise $100 million in order to provide Australian investors with a gateway to investing in India.
The LIC will offer investors a mix of equities and fixed income, designed for strong income and capital growth, a statement issued by the fund said.
India Fund Limited chief executive John Pereira said that although foreign investors have “flocked” to India on the back of the nation’s reform process, Australian investors are “under-invested”.
“Aussie investors have little or no exposure to this vibrant economy but we know there is hunger building, which is why we have created an investor-friendly structure to cater for local investors,” Mr Pereira said.
“India’s equities markets have shown stunning performance, but Australian investors want income and India’s interest rates are at seven and a half per cent.
“The LIC structure is perfect for offshore investment because it provides investors the protection and transparency of listing on the Australian Stock Exchange.”
The fund will provide investors with growth via stocks listed on the Bombay Stock Exchange and National Stock Exchange. Income will be generated by investment in Government of India Sovereign Bonds and Corporate Bonds.
The portfolio will also have an equities and fixed-income split, the statement said.
“The fixed-income component provides a degree of stability to the portfolio and gives investors a more comprehensive Indian allocation,” Mr Pereira said.
India Fund Limited’s portfolio will be managed by Indian investment managers Kotak Mahindra.