Invest in India’s Future: Groww Unveils Auto EV Index NFO Amidst India’s EV Boom
Given the growing trend of sector-based investing, Groww Mutual Fund has launched the Groww Nifty EV & New Age Automotive ETF FOF. With this, investors have a rare chance to invest in India’s fast-expanding electric vehicle (EV) market. This may be a wise bet if you’re searching for an investment that fits in with the mobility of the future. But why should you consider investing in this progressive fund? What does India’s future hold for new-generation vehicles and electric cars? Will it ultimately prove beneficial? Let’s investigate the solutions and learn about the possible advantages and special qualities of the Groww Nifty EV & New Age Automotive ETF FOF.
What is a Fund of Funds(FOF)
In a mutual fund, professionals create a portfolio of stocks picked by them. However, in a Fund of Fund, the portfolio consists of other mutual funds rather than individual stocks. It’s an excellent diversification tool that spreads investments across multiple funds.
Groww Nifty EV & New Age Automotive ETF FOF is one such FOF. It is an open-ended fund that invests in the Nifty EV & New Age Automotive Index. This index tracks companies in the EV ecosystem and those developing new automotive technology. Groww Nifty EV & New Age Automotive ETF FOF invests in the EV sector through other mutual funds that invest in the Nifty EV & New Age Automotive Index companies with the same weightage and proportion. The new fund offer (NFO) is currently open for subscription and will close on August 7, 2024.
The scheme will invest 95-100% in equities and related securities of companies involved in or benefiting from Electric Vehicles and upcoming automotive themes. It will also invest 0-5% in money market instruments, debt securities, or units of debt/liquid schemes of domestic mutual funds. The scheme will be benchmarked against the Nifty EV and New Age Automotive Index.
Please note that Groww Mutual Fund has no other FOF under this category.
Tracking the Future of Transportation: The Nifty EV & New Age Automotive Index
The Nifty EV & New Age Automotive Index tracks the performance of the EV ecosystem. The Index offers diversified exposure to large, mid, and small-cap companies. This includes Upstream (companies in chemicals, lithium mining, and battery materials), Midstream (companies in EV components, batteries, and technology), and Downstream (auto manufacturers like 2W/3W/4W).
The Nifty EV & New Age Automotive Index covers current automotive innovations like electric and hybrid vehicles and emerging technologies such as hydrogen fuel cells and autonomous vehicles. It also includes companies participating in government initiatives such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) and the Production Linked Incentive (PLI) schemes.
Notably, in 2023, EV sales in India jumped by 49.25% to reach 1.52 million units. The Groww Nifty EV & New Age Automotive ETF FOF aims to capture the recent boom in the EV sector in India by aligning with this emerging but comprehensive index. This growth, although still in its early stages, highlights the sector’s expanding potential.
India’s EV Market Surge: Projections, Investments, and Government Support
As reflected in the sales figures, India’s electric vehicle (EV) market is experiencing rapid growth, with projections indicating significant future expansion and increased EV adoption. According to Fortune Business Insights, the Indian EV market is expected to grow from USD 23.38 billion in 2024 to USD 117.78 billion by 2032. This shift towards electric vehicles opens new opportunities for automotive suppliers. The Indian EV battery market is also projected to grow from $16.77 billion in 2023 to $27.70 billion by 2028. On the infrastructure side, as of February 2024, there are 12,146 public EV charging stations across the country.
There is a strong sectoral tailwind with various incentives, including purchase discounts, tax exemptions, and subsidies. Under the FAME India Scheme, Phase II has allocated Rs. 5,790 crore (USD 693 million) for EV manufacturers.
The government’s strong focus on the EV sector is clear in the recent budget, which includes significant stimulus for importing critical minerals essential for electronics manufacturing and startups. This is crucial for the EV industry, which relies heavily on these minerals for battery production and other key components. All in all, by 2030, India is on track to become the largest EV market.
A New Investment Opportunity: Groww Nifty EV & New Age Automotive ETF FOF
Given a positive future outlook, the Groww Nifty EV & New Age Automotive ETF FOF is a new investment chance for those interested in electric vehicles (EVs). Subscription for NFO is now open, offering potential investors an attractive NAV of ₹10 per unit. Investing in an NFO can be a wise choice for those who are open to new opportunities and think long-term.
The EV sector is evolving, with many companies trying to grab the market share. It’s a smart choice to have a mix of different companies in your portfolio. The Groww Nifty EV & New Age Automotive ETF FOF provides you exposure to various companies in the Indian EV scene, from manufacturers to suppliers. With this NFO you can invest in the growing EV market as a whole without having to pick individual stocks. The NFO is available on major mutual fund platforms.
However, before making any investment decisions, it’s essential to consult your financial advisor to ensure that the Groww Nifty EV & New Age Automotive FOF aligns with your financial goals and risk tolerance. Please read the scheme information document thoroughly to understand the associated risks and benefits.
Disclaimer: This article has been produced on behalf of the brand by HT Brand Studio. The content is for information purposes only and does not constitute financial advice.
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Published: 27 Jul 2024, 12:30 PM IST
