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Fund Pick: IDBI Tax I-Nit '96

Dhirendra Kumar

IDBI Tax I-Nit '96, is a ten-year close-ended equity linked tax saving scheme. The fund is available for continuous repurchase at the NAV price. The fund has declared a 50 per cent dividend for all investors as on March 31, 2000.

Since the fund repurchases the units at a historic net asset value (NAV) of one week, investors can marginally gain by timing the exit out of the fund.

The fund has given an annualised return of 30.8 per cent as against 11.22 per cent by the Sensex since its launch. The fund has been an above average performer, outperforming the broad indices for most of the time periods. However, until the year 1999, the maximum NAV that the fund touched was Rs 10.44.

The rising markets of the year 1999 helped the fund gain as much as 128 per cent. Currently, the fund holds a respectable NAV of Rs 27.33. In the last three months and one year ending February 2000, it gained 54.5 per cent and 168 per cent respectively.

The fund was launched at a time when the markets were in a strong bear grip. Initially, it invested in large-cap cyclical stocks. The fund started outperforming the broad indices as late as September 1998. However, over the last one year, the fund has restructured its portfolio, and has gone overweight on the infotech stocks.

As on February 16, 2000, it has 44 per cent exposure in infotech, besides 10 per cent in pharma and 9 per cent each in media and FMCG. The fund has retained an 18 per cent exposure to the cyclical stocks.

The fund has reduced the number of scrips from over 50 to 28 and has also consolidated its positions with top 20 accounting for 87 per cent of the net assets. The fund is diversified across sectors and stocks, except that it holds 16 per cent in Infosys and 13 per cent in Satyam. Since February 9 till March 22, while the Sensex fell by 7.8 per cent, the fund has gained by 1.56 per cent. The fund is expected to yield good returns over the long term.

Fund Basics
Objective	Size (Rs cr)	NAV (Rs) 24/3/2000	Exit Price	Entry Price	Total Returns
Tax planning	110.5	27.33	27.33	—	30.80%
Benchmark Comparisons (%)					29/2/2000
	1M	3M	6M	1Yr	3Yr
Fund	17.20	54.45	88.01	168.01	NA
Sensex	2.08	17.41	11.83	60.22	14.26
Nat. Index	11.52	46.89	50.80	118.54	27.62
Obj.Avg.	12.26	44.09	62.46	129.77	28.55
Top holdings (16/2/2000)			Market value (Rs cr)		Net assets (%)
Infosys			17.26		15.62
Satyam Computer			14.28		12.92
Zee Telefilms			9.63		8.71
HCL Tech			7.43		6.72
Aptech			6.52		5.90
Sun Pharma			5.21		4.71
Reliance Ind			5.00		4.52
Dr. Reddy's			3.69		3.34
Mahindra & Mahindra			3.20		2.90
NIIT			3.14		2.84
Dabur			2.81		2.54
Corporation Bank			2.30		2.08
Britannia			2.25		2.04
HDFC			2.18		1.97
Cipla			2.17		1.96
ITC			2.10		1.90
HPCL			1.82		1.65
BPCL			1.70		1.54
Kodak			1.62		1.47
HLL			1.57		1.42

Source: Value Research

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