ICICI Prudential Conglomerate Fund NFO: Investing in India’s Business Powerhouses

Feature	Details
Fund Name	ICICI Prudential Conglomerate Fund
Fund House	ICICI Prudential Mutual Fund
Scheme Type	Open-ended equity thematic fund
Theme	Investing in Indian business conglomerates
NFO Period	October 3 – October 17, 2025
Benchmark Index	BSE Select Business Groups Index
Fund Manager	Mr. Lalit Kumar
Minimum Investment	₹1,000 and in multiples of ₹1
Exit Load	1% if redeemed within 12 months; Nil thereafter
Risk Level	Very High (as per SEBI riskometer)

Investment Strategy: What Makes Conglomerates Attractive?

The fund will primarily invest in companies that are part of Indian promoter-led conglomerate groups. These are large business houses that operate multiple listed (and unlisted) companies across different sectors. The fund’s strategy is based on the belief that such conglomerates offer:

• Diversification across industries

• Stronger capital access due to brand trust and balance sheet strength

• Agility to shift focus to high-growth sectors

• Synergy benefits across group companies

• Sustainable long-term vision due to promoter-driven ownership

By investing in these business groups, the fund aims to deliver long-term capital appreciation, while reducing exposure to risks associated with single-sector bets.

Universe of Stocks: Who’s Likely to be Included?

According to ICICI Prudential AMC, the investment universe comprises around 71 business groups and approximately 240 listed companies that qualify under the “conglomerate” definition.

Examples of such conglomerate groups could include:

• Reliance Industries – Energy, telecom, retail, financial services

• Tata Group – Software (TCS), steel, automotive, consumer products

• Aditya Birla Group – Cement, metals, telecom, financial services

• Mahindra Group – Automotive, finance, IT, hospitality

• Bajaj Group – Financial services, automotive, electricals

The fund may also invest in IPOs, follow-on offerings, or other listed opportunities that align with the conglomerate theme. Additionally, investments may span large-cap, mid-cap, and small-cap segments based on growth potential.

Benefits of the Conglomerate Theme:

Inherent Diversification

Unlike sectoral funds that focus on one industry, conglomerates operate across multiple sectors. This internal diversification helps reduce risk and smoothen returns across market cycles.

Strong Financials and Execution Capabilities

Conglomerates tend to have strong cash flows, better credit ratings, and easier access to capital. This enables them to fund expansion, manage downturns, and invest in innovation.

Ability to Pivot into Emerging Sectors

Large business groups often venture into new growth sectors like EVs, semiconductors, renewable energy, or digital platforms. The fund allows exposure to these sunrise sectors through trusted promoters.

Legacy and Governance

Many conglomerates in India have a decades-long track record, which often reflects in better corporate governance, strategic vision, and stakeholder trust.

Access to Undervalued Subsidiaries

Some listed entities in conglomerates may be undervalued due to lower visibility. The fund can capitalize on these opportunities before they unlock value.

Risks and Considerations

Despite the attractive theme, investors must be aware of certain risks associated with this fund:

Theme Concentration

Although conglomerates span sectors, the fund is still a thematic fund, not a diversified equity fund. If the theme underperforms the broader market, so will the fund.

Dependence on Promoter Performance

Weakness in a specific business group or missteps by a promoter can affect multiple companies within the fund’s portfolio.

Volatility of Mid and Small Caps

The fund may include mid and small cap stocks, which tend to be more volatile and sensitive to market cycles.

No Track Record

Since this is a new fund, there’s no performance history to evaluate the fund manager’s success in executing the strategy.

Exit Load and Lock-in Considerations

A 1% exit load applies if units are redeemed within 12 months, making the fund less suitable for short-term goals.

Who Should Invest?

The ICICI Prudential Conglomerate Fund is ideal for:

✅ Long-term investors (5+ years horizon)

✅ Investors with moderate to high risk appetite

✅ Those seeking thematic exposure beyond conventional sector funds

✅ Investors who already have a core diversified portfolio and want a “satellite” fund for added alpha potential

✅ Those who believe in the India growth story led by business houses

This fund may not be suitable for:

❌ Conservative investors looking for stability

❌ Short-term investors or traders

❌ Those new to equity investing

❌ Investors are uncomfortable with higher volatility

Taxation & Exit Load

• Equity taxation applies:

• Short-term capital gains (STCG): 15% if redeemed within 12 months

• Long-term capital gains (LTCG): 10% on gains above ₹1 lakh after 1 year (as per prevailing tax rules)

• Exit load:

• 1% if redeemed within 12 months

• Nil thereafter

Investors should consult a tax advisor or financial planner to understand the tax impact based on their profile.

A High-Conviction Theme with Long-Term Potential

The ICICI Prudential Conglomerate Fund introduces a novel thematic opportunity by focusing on India’s largest and most influential business groups. In an economy where conglomerates play a leading role in shaping industry trends, capital allocation, and innovation, this fund offers investors a chance to ride on their collective strength.

That said, this is not a substitute for diversified investing. It’s best used as a satellite exposure (5–15% of your equity portfolio) alongside core holdings in flexi-cap, large-cap, or multi-cap funds.

With a strong fund house backing, a clearly defined theme, and access to powerful Indian business houses, the ICICI Prudential Conglomerate Fund is worth considering — provided you understand its risks and are ready to stay invested for the long haul.