Sensex has lost 1,600 points from its peak and valuations have fallen to 17 times earnings from a high of 21 times and many brokerages believe it is a good time to buy.
Mutual funds do not want to miss this opportunity either. According to sources Reliance Mutual Fund is planning to launch new funds worth Rs 8,000-Rs 12,000 crore soon.
These New Fund Offerings (NFO) are likely to be close-ended funds for long-term capital appreciation. Reliance Mutual Fund also wants to increase Assets Under Management to Rs 85,000 crore by year-end which are Rs 65,000 crore as on August 1.
Mutual fund business is all about distribution and reach, Reliance Capital has plenty of both. Reliance Money is also planning to ramp up its distribution network from 4,000 centers in 700 cities now. It also aims to increase its customer base to two lakh by 2008-end.
Worldwide the appetite for risk has come down. Analysts say mutual funds will have tough time to post returns in these challenging times, so we have to wait and see whether these New Fund Offerings amidst so much uncertainty will take off.
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