Taurus Mutual, Parsoli Form Alliance For Islamic Fund

India’s first Islamic fund scheme from a domestic mutual fund is set to be launched. Taurus Mutual Fund has entered into a tie-up with Mumbai-based Parsoli Corporation to launch Taurus Parsoli Ethical Fund, a Shariah- compliant Islamic fund, which will be a close-ended equity oriented scheme. The scheme document has been filed with Sebi for approval, reports - The Economic Times.

The Islamic fund, a first of its kind by a domestic mutual fund, will provide capital appreciation and income distribution to unitholders by investing in a diversified portfolio of equities that are Shariah compliant.

The scheme will not invest in companies providing financial services with interests in conventional banks, insurance companies or companies involved in businesses not approved by Shariah such as companies manufacturing, selling or offering liquor, pork meat, or involved in gambling and night club activities.

Parsoli Corporation is a BSE and NSE member. It offers its Muslim clients the option to trade in listed Shariah-complaint stocks. It has also compiled a Islamic Equity Index comprising the most liquid stocks of Shariah-compliant companies listed on NSE and BSE.

Under the scheme, after preliminary screening by Parsoli Corporation, each potential investment will be presented to a Shariah Board comprising Islamic scholars. The board will give guidance on the acceptability or otherwise under the Shariah of each company in which investment is recommended.

The board will conduct a Shariah review every quarter and an audit once a year. It is estimated that 360 stock out of the BSE 500 group will be compliant under the scheme, and 70 of the BSE 100 group will also be compliant.The scheme will not invest in conventional banking and companies where income from interest-related activities is substantial.

Also, companies with a debt to equity ratio in excess of 33% or whose cash and receivables exceeds 45% of total assets and whose non-operating interest income is greater than 5% of gross revenue.