Reliance MF eyes Rs 100 crore from Power Fund

Reliance Mutual Fund (RMF) is planning to raise close to Rs 100 crore from its first power sector fund "" Reliance Diversified Power Sector Fund.

Sunil Singhania, a fund manager with RMF, said, "Our target is to raise anywhere between Rs 50-100 crore through the initial offer from the fund which opened on March 29, 2004. The offer will close on April 15, 2004."

Explaining the rationale behind the launch of the diversified power sector fund, Singhania said, "We are bullish on the power sector, which is expected to grow for a period of four-five years and above. Moreover, our fund is dynamic, so there is no compulsion in investing in equities immediately. We have the flexibility of moving completely out of equity and get into debt if the market conditions are not conducive, which is not available in a diversified fund."

This is the second sector fund to be launched by RMF. The fund had launched the first banking fund in May 2003, which has delivered returns in excess of 80 per cent in the last 10 months ended March 31, 2004, on an absolute basis.

Singhania said, "We rely extensively on the behavioural style of investing and take advantage of sharp price movements. Moreover, we have a disciplined approach to selling and not averse to selling quickly if the price target is achieved."

He added, "We are one of the few fund houses to focus on absolute returns and use intensive in-house research before taking investment decisions."

On RMF's investment approach, Singhania said, "As a fund house we have focused more on mid-cap stocks as we believe that there is lot of value which can be unlocked out of efficient and scaleable mid-caps." He added, "In fact, eight out of the top 10 mutual funds would be having portfolios which are almost similar, but ours is a different approach."