ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Housing Opportunities Fund, it said in a media release. It is an open-ended equity scheme with claims to provide long-term capital appreciation by investing in equity and equity related instruments of entities engaged in and/or expected to benefit from the growth in housing theme.

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The New Fund Offer (NFO) opens on March 28, 2022 and closes on April 11, 2022.

The housing theme covers sectors including cement, consumer electronics, housing finance, banks, power, steel, LPG/CNG/PNG/LNG supplier etc.

The AMC opines that the housing theme is 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. With the number of Indians living in urban areas 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 release said.

Housing sales volume across seven major cities has surged 113 per cent year-on-year, the release said.

The residential sector is expected to receive a further boost under the Pradhan Mantri Awas Yojana (PMAY) scheme, it said.

"Housing as a theme, we believe is at the cusp of a strong cycle. India’s favorable demographics, growing middle class population, increased urbanization, better affordability and lower home loan interest rates are creating a conducive environment for housing and allied themes,” Chintan Haria, Head - Product Development and Strategy, ICICI Prudential AMC said.

“Moreover, the Government has been trying to stimulate activity in the sector through various supportive measures like affordable housing, affordable rental housing complex (ARCH) scheme, increase in capex, stamp duty cuts, 100% FDI for townships and settlements development projects to name a few. India being one of the fastest growing economies should see strong demand for housing as was seen historically in other developed economies,” he said.

S Naren and Anand Sharma will be the fund managers of the scheme. The benchmark of the scheme is Nifty Housing TRI. The minimum application amount at the time of NFO is Rs 5,000 (plus in multiples of Re 1).  The scheme is suitable for investors looking for opportunities to participate in potential growth of Housing theme in the country.

The AMC puts this MF under “very high risk” category.