India’s second-largest fund house ICICI Mutual Fund has rolled out ICICI Prudential Housing Opportunities Fund. The schemes will invest in beneficiary companies from the Housing space. The housing theme encapsulates various sectors like cement, consumer electronics, housing finance, banks, power, steel, gas suppliers (CNG, PNG), paints and so on. This is the second offering from any fund house in India. Before this, HDFC Mutual Fund launched HDFC Housing Opportunities Fund in December 2017.
The Investment Rational
Fund house believes that housing as a theme seems to be poised for a turnaround as the real estate oversupply of 2008-2012 appears to be digested. This may lead to less pressure on real estate prices, thereby aiding housing as a theme to perform better. The another trigger point for launching this scheme is optimistic numbers thrown in All India Debt & Investment Surveys. According to the survey, the number of Indians living in urban areas is expected to reach 525 million by 2025 and 600 million by 2036, Real Estate sector in India is expected to reach USD $1 trillion by 2030. The early signs of this are visible in the healthy growth of housing sales volume (across seven major cities), which surged 113 per cent YoY, signifying healthy recovery post lockdown. Furthermore, the residential sector is expected to receive a boost under the Pradhan Mantri Awas Yojana (PMAY) scheme. Also, the segment is an attractively valued post going through a time correction since 2013.