Hybrid equity and debt IPO

The Prudential ICICI Blended Plan is an open-ended fund investing in a basket of equity, derivative, debt and money market instruments. With a profile designed to provide capital appreciation and income distribution, the fund aims to use the arbitrage route in gaining from market situations. The restricted exposure makes it attractive to conservative equity investors who want some growth along with stability of income.

There are two plans, Plan A is for more risk and Plan B for less risk. The minimum investment stands at Rs 5,000, with redemption pegged at an exit load of 0.50 per cent. There is no entry load, but the scheme will charge the 6 per cent of the amount collected from the market as the initial issue expenses and amortise this over five years.

Nilesh Shah , Chief Investment Officer, Prudential ICICI AMC answers some questions around the IPO.

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Will the market have a direct influence on this fund
The fund is dependent on the market only to the extent of arbitrage and is mostly neutral to the phases of bullish and bearish cycles-except maybe, for the sentiment reasons.

How does this fund work?
The fund will capture the difference between the cash price and future price through the arbitrage route. It will be buying in cash and selling it in the future markets. By nature this fund is not for investment, but it gives returns comparable to liquid fund and short-term bonds.