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Tuesday, January 13, 2009

Tata Infrastructure Tax Saving Fund floats on

NFO period from 17 December 2008 - 16 March 2009

Tata Mutual Fund has launched Tata Infrastructure Tax Saving Fund on 17 December 2008. The New Fund Offer (NFO) period for subscription will close on 16 March 2009. The NFO face value of the new fund is Rs 10 per unit.

The scheme is a 10 years close-ended equity linked saving scheme with a compulsory lock-in period of three years. The units under the scheme stand automatically redeemed on maturity.

The investment objective of the scheme is to seek to provide medium to long term capital gain by investing predominantly in equity / equity related instruments of the companies in infrastructure and infrastructure related sectors along with the income tax benefit to its unit holders.

As per the provisions of section 80C of Income Tax Act, 1961, investments made by the individuals & HUFs in this scheme (along with other prescribed investments) will qualify for a deduction up to Rs. 1 lakh from gross total income.

The scheme invests 80-100% of net asset equity and equity related instruments out of which 65-100% will be invested in equity and equity related instruments of companies in infrastructure and infrastructure related sectors with high-risk profile.

The scheme may invest up to a maximum of 20% of the scheme's net assets in debt, money market and securitized debt instruments. The scheme will invest in securitized debt up to 20% of the net assets of the scheme only if it is permitted under the ELSS Guidelines in future. The Scheme will not take any exposure to ADR/GDR's or to any form of derivative instruments and will do so in future only if specifically enabled by any amendment to ELSS guidelines in future.

No investments will be made in foreign securitised debt. Not more than 25% of the net assets of the scheme shall be deployed in securities lending. The Scheme would limit its exposure, with regards to securities lending, for a single intermediary, to the extent of 5% of the total net assets of the scheme at the time of lending.

The scheme has growth and dividend option. Dividend option offers dividend payout and dividend re-investment facility.

The scheme will charge 2.25% as an entry load for each investment amount of less than Rs 2 crore while for investment amount greater than Rs 2 crore no entry load is applicable. The Fund will not charge exit load.

The minimum investment amount is Rs 500 and in multiples of Rs 500 thereafter. The scheme seeks to collect the minimum target amount of Rs 2 lakh during the NFO period.

The scheme will be benchmarked against BSE SENSEX.

Venugopal M. and Mahendra Jajoo will manage the scheme.

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