Fidelity's maiden offer rakes in Rs 1500 crore

Fidelity Investments' maiden scheme in India, Fidelity Equity Fund, is reported to have collected Rs 1,500 crore thus far, according to information received on the closing day of the initial offering.

According to the trade information, the scheme has received overwhelming response from retail investors, especially those who have invested through the Systematic Investment Plan (SIP).

Sources familiar with the development said that the fund had tied up with a lot of banks which were aggressively pushing the product through the SIP route. Fidelity is the only fund which has offered a SIP facility during the initial offer period.

Company officials were, however, not available for comments. Sources, however, said that the fund could end up with a higher collection as these were just initial estimates culled from the urban centres.

Initial offerings by mutual funds have been receiving substantial response from the markets in recent times. Recently, Reliance Equity Opportunities Fund had collected over Rs 1,700 crore.

The Fidelity Equity Fund is an open-ended equity growth scheme while investments will be done on the basis of a bottom-up approach, which is followed by Fidelity worldwide.

The offer had opened for subscription on March 21 this year. The investment portfolio would consist of around 75 stocks, with a cap of four per cent holding in any one stock.

Meanwhile, fund industry officials are hoping that the entry of Fidelity into the Indian markets will change the entire structure of the segment - which is totally in the hands of the distributors now.

With Fidelity's marketing and financial muscle, they hope that the grip of the distributors on the segment will loosen and it will become more investor-centric.

They also expect the brokerage rates to go down considerably, thus taking off some of the pressure from the asset management companies.