The NFO provides an opportunity to arm the portfolio with India’s Defence Sector

Bengaluru, August 09, 2024: Aditya Birla Sun Life AMC Limited (ABSLAMC) was incorporated in the year 1994. Aditya Birla Capital Limited and Sun Life (India) AMC Investments Inc. are the promoters and major shareholders of the Company. ABSLAMC is primarily the investment manager of Aditya Birla Sun Life Mutual Fund, a registered trust under the Indian Trusts Act, 1882. The asset manager has announced the launch of the Aditya Birla Sun Life Nifty India Defence Index Fund, an open-ended index fund tracking the Nifty India Defence Index. The New Fund Offer (NFO) will remain open from 9^th August 2024 to 23^rd August 2024.

India’s defence sector is undergoing a significant transformation, driven by the government’s emphasis on self-reliance and modernization. With a defence budget of INR 6.22 lakh crore and projected 15% CAGR in capital expenditure from FY24-30, India is enhancing both military capabilities and economic resilience. The Aditya Birla Sun Life Nifty India Defence Index Fund offers investors an opportunity to participate in this industry momentum. By tracking the Nifty India Defence Index, the fund provides exposure to a diverse range of companies contributing to the nation’s defence capabilities. This includes players involved in manufacturing, aerospace, shipbuilding, and defence electronics.

Commenting on the new fund launch, A. Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC Ltd, said, “The government has significantly increased its investment in the defence sector to meet internal needs, reduce import dependence and produce for the rising global demand. The focus is on building resilience and enhancing the counter-capabilities of the country’s defence system. The sector features high barriers to entry due to its capital-intensive nature and the continuous evolution of product types. There is substantial market growth potential, given the low-cost base, and companies in this sector are expected to gain higher market share as demand surges.”

The fund offers long-term investors diversification through index-based investing, appealing to those interested in arming the portfolio with India’s defence sector driven by growing order books and government policy. With policy volatility expected to stabilize post-budget, strong sales and margin growth are driving valuations, supported by improved analyst ratings reflecting competitive moats. Ongoing government capex, supportive procurement policies, and growing export demand due to geopolitical factors bolster the sector’s prospects.

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