STEP INTO THE AMRITKAAL WITH

HDFC MANUFACTURING FUND

NFO PERIOD: 26th April to 10th May, 2024
     

FY23 FY30E
Nominal GDP 3,353 2X 7,000
Manufacturing GVA 453 2.8X 1,281
Overall exports 778 2X 1,552
Merchandise exports 453 2.6X 1,198
Overall capex, GCF 1,080 2X 2,112

All figures in USD bn

Source: PIB, UBS, Morgan Stanley Research
GDP -Gross Domestic Product
₹
GVA- Gross value added
GCF - Gross Capital Formation

The information herein is based on expectations and the actual results could vary materially. This is not indicating returns
from any investments. There is no assurance as regards performance of any company, sector or investment.
02
02
  


   

   


    
  


 
  

02
03
 

 

Average Real GDP Manufacturing Manufacturing share at

Country High growth growth in high share at start of the end of high
phase growth phase high growth phase growth phase

Thailand 1985-1991 9.3% 21.9% 28.2%

China 1990-2005 9.8% 9.1% 32%

Indonesia 1983-1996 6.3% 13.4% 24.1

Vietnam 2010-2022 6.1% 19.2% 25.8%

India 2023-2030 ?? 15% ??

Most Asian peers have higher share of manufacturing in GDP

India’s Manufacturing share in GVA targeted to grow

from ~15% to 20% by 2030, when GDP could be US$7 trillion

Source: UBS Research

02
04
  

Manufacturing leads to holistic growth and large-scale employment

~45% of India's labor force is employed in Agriculture
China's journey to an upper-middle income country saw people moving from ‘farms’ to ‘factories’

Manufacturing adds ~4x more value vs. Agriculture… .....Explaining China’s journey from Low to upper
Level of labour productivity (during 2008-17), Rs '000
middle income
50
350 332 45 India
297

Share of Agriculture in
40

Total Employment (%)

300 Bangladesh
35
250 30 Vietnam
China (1990) Indonesia
200 25 Philippines
20
150
15
100 71 10
5 China
50
0
0 200 2,200 4,200 6,200 8,200 10,200 12,200 14,200
Agriculture & allied Manufacturing Services
GDP per capita ($)

Source: UBS Research, Morgan Stanley Research

02
05
 

India’s merchandise import (Excl. Oil & Gold) has been increasing
INR has depreciated 3.3% against USD (10Y CAGR) and median inflation has been ~5.2%
Vietnam and China, with high manufacturing exports, have current account surpluses;
leading them to enjoy much lower currency depreciation* and hence lower inflation

Growth in consumption without commensurate Current Account being in control is key for
manufacturing growth leading to higher trade deficit macroeconomic resilience
-120
Non-Oil Non-Gold Trade Deficit, USD mn -103 -99
-100
10Y Median China Vietnam India
-80
-54 -60
-50 -44 -44 Median Inflation (%) 1.9 3.2 5.2
-39 -38
-32 -31 -40
-22 -25 -25 -23 Current account balance (US$ bn) 236.0 5.8 -32.0
-10 -20
-3 -4 -7
0 CAB as % of GDP 1.7 1.9 -1.2
9 6
20
Currency Depreciation* (%) 1.5 1.4 3.3
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2022
FY2023
FYTD2024

*against USD

CAB: Current Account Balance

Source: Morgan Stanley Research, UBS Research 02
06
 

Convergence of Several Enablers to provide
Multi Decadal Growth

­­ €‚ƒ‚„ ­ †‡‚
  ˆ € †‡

ˆ€ 
‚

Large Consumer base Large & skilled Labour pool Focus on Atmanirbharta
Large Export opportunity in the
Multipolar World + Cost advantages vs peers
+ Low leverage + higher
capacity utilization
Improving infrastructure
Macro-economic stability +
Service ecosystem to support geopolitical factors
high end manufacturing

02
07
‰   Š

What ailed Manufacturing Steps taken to address these Outcomes

over the years? issues

National Logistics Policy - Rank improved from 54 (in 2014) to 38 (in 2023) in
High logistics costs
Road and Rail infrastructure World Bank's Logistics Performance Index

Investments in roads, power Road construction 3 kms per day in 2013 to 30 kms
Poor infrastructure
and railways per day in 2023, 4901 km expressways(FY23), DFC, etc.

Complex labour laws Introduction of labour code Consolidation of 44 laws into 4 codes

Focus on improving ease of Rank improved from 142 to 63 in World Bank's

Low ease of doing business
doing business Ease of Doing Business Ranking 2020

Manufacturing share in GVA targeted to Introduction of PLIs, Phased Manufacturing

Lack of government focus
touch 20% by 2030 (from 15% currently) Program, etc.

Unfavourable FTAs Non-Tariff barriers BIS quality certification, import licenses, etc.

Source: PIB and other publicly available information.

DFC: Dedicated Freight Corridor
02
08
‡   

India is Fastest Growing Consumer Market ..providing sufficient scale to support local manufacturing

Trend in Consumption % India Share in World (Ex China) x India’s Rank in the World (Ex China) demand
90%
The size of the bubble is Smart Phone Room ACs Fully Automatic Referigerators Cars
80% Philippines consumption in US$bn Washing Machine
US
12% 12%
Consumption, % of GDP

70% 5% 5%
11%
60% India
Malaysia Vietnam
50% 7%
Indonesia 14.6 8.5 2% 3.5 2% 13.7
4.78
40% 4% 5%
China 7.2 3.15
1.6
30% Singapore 4.4 3.3

20% CY13 CY23 CY13 CY23 CY13 CY23 CY13 CY23 CY13 CY23
3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 6 1 5 2 10 4 10 4 6 3
Consumption, YoY% 5 yr avg (nominal)
Volumes (million units)

With consumption growth highest amongst peers,

India is now among the Top 3 / 5 markets for key products globally

Source: Morgan Stanley, UBS, BoFA research

02
09
‰‹Œ€  

The shift away from China has accelerated post Covid pandemic
China’s share in US Goods imports has declined from 21% in 2018 to 13% in 2023

India, Vietnam, Taiwan and Thailand have seen rising Manufacturing a product in India is on an average 15%
share in US Goods imports cheaper relative to US, and should lead to increasing
exports over time

Share in US Goods Imports % BCG Global Manufacturing Cost Competitiveness Index

2018 2023 2022 landed cost—including manufacturing cost, logistics, and tariffs
4.0%
130
3.5% 121
25% 120
3.0% 113
110 110
2.5% 20%
100 100
97 97 96
2.0% 15% 92
90 85
1.5% 82 81
10% 80
1.0%
5% 70
0.5%
0% 60
0.0% China** Western Australia US & Easter Japan & China South India Southeast Mexico
Vietnam Thailand India Taiwan China Europe Canada Europe S.Korea America Asia

Source: Bloomberg, U.S. International Trade Commission Source: BCG Analysis, Sep 2023
China** includes US Code §301 tariffs on Chinese imports chart displays
maximum value of 25%.
02
10

‹‚  Ž‚  ‰

India’s merchandise export market share to increase from 1.8% to 3.5% by 2031 implying CAGR of ~11%
Merchandise exports is expected to grow faster than services

India Exports (US$ bn) India Share in World Exports

2,000 7% 6.4%
6%
1,500 683 5% 4.4% 4.5%
4% 3.5%
9%
1,000 3% 2.4%
1.8%
2%
309 1198 0.6%
500 1% 0.5% 0.5%
453 11% 0%

1991
2001
2011
2021
2022
2031E
1991
2001
2011
2021
2022
2031E
1991
2001
2011
2021
2022
2031E
0
1991 2001 2011 2021 2022 2031E

Merchandise Exports Service Exports Merchandise Services Total

Source: Morgan Stanley

The information herein is based on expectations and the actual results could vary materially.
This is not indicating returns from any investments. There is no assurance as
regards performance of any company, sector or investment.

02
11
‡ ‘ ‡

India to become the largest pool of Labor supply…. ...with lowest labour cost globally
Addition in 30-60 age cohorts by 2045 Average Monthly Earnings of Employees in Manufacturing Sector
US$
200 (mn people) 6000
152
150 5058
Increase/Decrease in age (30-60) population by 2045 5000
100
50 4000 3644 3549 3467
13 3 2 1 1
0 3000 2687
-3 -4 -11
-50 2000
-45
-100 1000
1000 605 458
-150 -119 323 278 198 189
0
India

US

Brazil

Australia

Viet Nam

UK

Taiwan

Thailand

Japan

Europe

China

US

Singapore

Korea

UK

Japan

China

Malaysia

Thailand

Vietnam

Philippines

India

Indonesia
Source: UN, Jefferies Source: ILO, UBS

India scores high against peer Asian manufacturing nations

Country Labour cost ($ per hour) Working Age population STEM graduates English speaking graduates

India's Rank 2 1 1 1

Notes: Countries considered for this exercise: China, Vietnam, Indonesia, Philippines and Thailand
02
12
 
Π

FY28 project exports (US$ bn) Projected exports CAGR (FY22-28)

Chemical ~$110 - $130 19% - 23%

Pharma ~$45 - $50 16% - 18%

Industrial machinery ~$70 - $75 18% - 20%

Electrical & electronics ~$120 - $145 35% - 40%

Automotive ~$45 - $55 15% - 18%

Textile & apparel ~$95 - $110 13% - 16%

Source: Bain analysis

The information herein is based on expectations and the actual results could vary materially. This is not indicating returns from
any investments. There is no assurance as regards to performance of any company, sector or investment. 02
13
 ‚  ‚ 

Production cost per unit to manufacture a Fan Cost benefit for India vs Peer Manufacturing Nations
China vs India
US$ Cost assuming Total Production per year - 8,254,615 Estimated Cost for producing a fan in US$

China India
13 12.5
Cost of Goods Sold 4.25 4.67 12
Labour cost 0.83 0.34 11
10 9.6
Other cost (electricity and depreciation) 0.03 0.03
9 8.7
Annual Production costs per unit 5.12 5.03
8
7.1 7 6.9 6.9
7 6.7
Freight cost (assuming 50/50 revenue split EU/US) 1.88 1.67 6
5
US Korea Poland Thailand China Indonesia Vietnam India
Average cost (assuming 50/50 revenue split EU/US) 7.00 6.70

Lower labour cost is already helping India become As scale increases, India could see further
lowest cost producer cost advantages

Source: UBS Research

02
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­ €  € Œ


1.76x in 2023 vs. 2014 2.5x Electrified in last 10y 2x in last 10y 2.5x in 2023 vs 2015,
(1,535 vs. 871 MTPA) (85% vs. 33%) (1.5 lakh km highway network) Target 500 GW by 2030

Average TAT improved DFC – Rail has increased Road avg kms/truck/day Peak power shortage of 17%
from ~82hrs (FY17) to from 72hrs (FY18) to 24hrs increased from 190 (FY15) (FY13) to almost NIL (FY23)
48hrs (FY23) (FY23) to 250 (FY23)

†’ ‘ 

Source: PIB, Company data

MTPA: Million Tonnes per annum
TAT - Turnaround Time
02
15
­  ­  Š

India has significant presence in the services segment of the high value manufacturing supply chain
Advanced manufacturing is also on the horizon underpinned by high-end service economy
20% of global chip design engineers are in India
Qualcomm- one of the largest chip supplier has 35% of its employees in India designing high end chips

India needs Foundry & OSAT to realize

full localization

Semicon System level

Assembly and PCB assembly
Design Manufacturing assembly
Testing (OSAT) (PCBA)
(Foundry) (ODM, EMS)


Entails chip sizing, layout Pattern wafers with Package individual IC Assemble packaged Integrate PCBA with
& transistor linking designed layouts chips & conduct testing IC chips onto PCB other modules

US$18bn of investment approved for OSAT and

 20% chip designers & Over last 3Y India has emerged as fastest
foundry to be commissioned in phases
 engineers based in India growing manufacturer in these verticals
over CY25- 28

Possible to leverage this More large-scale investments in foundries Indian production expected to grow 3x and
   
talent pool and OSAT are likely to be announced exports by 8x in next 4-5 years

OSAT: Outsourced Semiconductor Assembly and Test, PCBA: Printed Circuit Board Assembly, ODM: Original Design Manufacturer, IC Chips: Integrated Circuit Chips
Source: PIB
02
16
Œ ‚ 

Snapshot of PLI schemes and their impact Base Corporate Tax Rate in Asian Economies Indian Defence production could grow
4x by 2030

Number of sectors: 14 30% Indian Defence Production (US$ bn)

25% 43
22%
Actual Investment Incremental Domestic
till FY23 Production till FY23 20% +18.6%
15% Exports
Rs 62,500 Crore Rs 6,74,000 Crore 15%
10% 33
Exports boost Employee
+5.7%
till FY23 Generation till FY23 5%
Rs 2,56,000 Crore 3,25,000 13
0% 11

Sri Lanka
Bangaldesh
China
Indonesia
Korea
Malaysia
Japan
India
Cambodia
Taiwan
Thailand
Veitnam
Singapore
India*
Philippines
Key Sectors - Large-scale electronics 10 11 10
manufacturing, pharmaceuticals, telecom 1 2
and networking products, food processing
FY20 FY23 FY30
and white goods.

Source: Morgan Stanley, PIB Source: World Bank, Morgan Stanley Research Source: IBEF, Invest India, Expert Interviews, BCG Analysis
* for new manufacturing companies with operations
commencing before Mar-24

Focus on Atmanirbharta implies Manufacturing growth could be > GDP growth

Did you know?
India has very competitive tax rates for corporate sector, and has even lower rates for new manufacturing companies
that commenced operations before March 2024
02
17
 ‹     

Low Leverage within Listed Companies Improvement in Capacity Utilisation Levels

Gross D/E ratio for large listed companies

1.2 (x) 85 (%)

0.99 Corporate leverage

1.0 at ~15 year lows 80
Current : 74.6%
0.8 75
0.57

0.6 70

0.4 65

0.2 60

Sep-09
Mar-10
Sep-10
Mar-11
Sep-11
Mar-12
Sep-12
Mar-13
Sep-13
Mar-14
Sep-14
Mar-15
Sep-15
Mar-16
Sep-16
Mar-17
Sep-17
Mar-18
Sep-18
Mar-19
Sep-19
Mar-20
Sep-20
Mar-21
Sep-21
Mar-22
Sep-22
Mar-23
Sep-23
0.0
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24e
Capacity Utilisation (Tr-4Q moving average)

Source: Jefferies

02
18
   ‹‡  

Share of Manufacturing Sector in New Company Manufacturing FDI (3 year rolling avg) (US$bn)
Registrations
30% 17
15.0 15.3
28%
28% 15
13.7 13.7
13.0 13.0 13.0 12.7
13 12.3 12.3
26%
10.3 10.7
24% 11
22%
22% 8.3
21% 9 8.0

20% 7

18% 5
2015 2018 2022 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

Source: CMIE

Did you know?

MNCs led large part of China’s manufacturing export boom of 2000s, with a share in exports of 58% in 2005.
Over time local champions become large and now MNCs contribute ~34% of Chinese exports

Source: Jefferies

02
19
 
­  

02
20
‹­ 

Mobile phones were a large import item with import mix of 78%
Over time local manufacturing ecosystem developed supported by PLI
Value of production has increased ~7x and exports by 60x since FY16
India’s rank in global mobile phone exports has improved from 178 in FY16 to 5 in FY23

Production in India (INR bn) Exports from India (INR bn) Imports as a % of Total Market Value
1,000 900 100%
4,000
3,500
800 78%
80%
3,000 2,750
600
2,200 450 56%
2,140 60%
2,000 1,810 400
272 229
1,320 40% 30%
900 200 114
1,000 15 11 14 19%
540 20%
-
189 6% 4% 8% 5% 4%
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
-
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 0%
Exports FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Rank: 178 239 19 19 8 9 9 5

Source: JM Financial

02
21
   ˆ “

iPhone Production ramping up in India Samsung led a large push in exports from Vietnam, and
today accounts for >US$65bn of goods exports

Year Models Global Shipment Share (%) US$ bn Samsung's Vietnam subsidiaries' exports, US$ bn
70 as % of Vietnam's merchandise exports, RHS 66 30%
2017 iPhone SE (1st Gen) <1%
60 25%
2018 iPhone 6S <1%
50
20%
2019 iPhone 7 & XR ~1% 40
15%
2020 iPhone 11, SE ( 2nd Gen) <2% 30
10%
20
2021 iPhone 12 3%
10 5%
2022 iPhone 13 & 14 7%
0 0%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022
2023 iPhone 15 10%

Source: Apple, Ministry of Commerce, Jefferies Source: UBS Research, Department of Vietnam Customs

Did you know?

India contributes ~12% of Apple’s iPhone supply and it is expected to increase to ~25% in 2-3 years

02
22
‹   Ž­  

Did you know? Indian pharma manufacturing has been a major success
India is now the one of the largest manufacturer of 3Ws story, with formulations and biologicals exports growing
and tractors (first), two-wheelers (second), heavy trucks at 8% CAGR vs 5% for the global market
(third), and cars (fourth) in the world and is a significant
Indian companies have gained large share in generics
producer of auto parts
segment in the US

India Auto Parts Trade Balance has improved US Generics Volume Share by Country %
Net Exports (USD bn)
100%
1.0 0.7
0.5 80%
- 60%
(0.5) (0.2) 32% 34% 42% 45% 45% 46% 48%
(0.5) 40%
(1.0)
(0.9) 20%
(1.5)
(2.0) 0%
FY17 FY18 FY19 FY20 FY21 FY22 FY23
(2.5)
(2.5) (2.5)
(3.0)
US India EU Others
FY2018 FY2019 FY2020 FY2021 FY2022 FY2023

Source: ACMA, Elara Securities Research

02
23
‹ ­ 

Value of imports for AC and its components Toys exports have started to increase EMS Industry could mimic this success
has nearly halved, and Import content per gradually & imports are declining fast story, with expectations of 25% CAGR
unit has declined by ~60% in exports

Import Value ($mn) India's Toys and Gaming Trade ($mn) 30 47.8%
40.0%
1,400 1,329 250 400 372 24.9%
234 25
20.0%
1,200 344 10.6%
204 200 350 327 326 19.40

INR Lakh crores

20 0.0%
1,000
300
837 -20.0%
800 150 15 13.46
727 239 239
250
-40.0%
600 203 10
100 200 178 8.12 8.08
159 6.38 -60.0%
400 77
50 150 5
110 -80.0%
200 1.15
100 0 -100.0%
0 - FY19 FY20 FY21 FY22 FY23 Consumption Production Exports
CY14 CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23

Finished AC + Components Import Content/AC Exports Imports FY22 FY27E 5 year CAGR

EMS - Electronic Manufacturing Services

Source: JM Financial, Nirmal Bang Research

02
24
‹
 

Tiles market – India gaining an edge Cables and Wires –

Exports have nearly doubled in 5 years
China Tile Exports volume (MSM)
India Tile Exports volume (MSM) India' C&W Exports
1,800 1,717
1,200
1,600
1,000
1,400 1,274
800 1,133

US$ mn
1,200
1,003
600 1,000 891
400 800

200 600

- 400
CY14 CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 2,018 2,019 2,020 2,021 2,022

Total Export

MSM: Million Square Metres

Source: ICICI Securities, HSBC Research
02
25
” 

02
26
 

Core Portfolio Investment Style / Portfolio Market Cap

Stock Selection Concentration

Core of the portfolio Stock selection will be Reasonably well Flexible across market
(at least 80%) will be based on bottom-up diversified portfolio capitalisation
invested in stocks that research ideas which are
represent the diverse expected to have long
sectors of manufacturing runway for growth

HDFC Mutual Fund / AMC is not guaranteeing returns on investments made in the scheme.
The current investment strategy is subject to change depending on the market conditions.

02
27
   

Number of companies Market Cap (Rs lac cr) %

Manufacturing Universe (Mcap >1000cr) 691 154.34 100%
By Sector The Fund shall invest in companies:
Capital Goods 190 25.89 17%
Oil, Gas & Consumable Fuels 12 25.02 16% that are engaged in manufacturing
Automobile and Auto Components 72 24.19 16% activity,
Healthcare 77 18.48 12%
Consumer Durables 72 13.45 9% that may benefit from Government’s
Fast Moving Consumer Goods* 63 12.62 8% Make in India initiatives,
Metals & Mining 27 11.88 8%
that are positioned to substitute
Chemicals 95 10.71 7%
India’s imports by manufacturing
Construction Materials 28 8.82 6%
locally,
Textiles 35 2.25 1%
Others 20 1.02 0% that export goods manufactured in
India and have the potential to
By Market cap classification increase employment in India
Large Cap 43 85.55 55%
Mid Cap 76 33.42 22%
Small Cap 572 35.38 23%

Manufacturing covers ~37% of the overall market cap, and is well diversified amongst sectors and market capitalisation

* excluding Diversified FMCG and Personal Products

Source: Capitaline, AMFI, Bloomberg. Data as of February 29, 2024
Above list is for illustration purpose only. Please refer to Scheme Information Document for more information. 02
28
€ ‚„

Period CAGR returns Volatility Return-risk

NIFTY India NIFTY India NIFTY India

Manufacturing NIFTY 500 NIFTY 50 Manufacturing NIFTY 500 NIFTY 50 Manufacturing NIFTY 500 NIFTY 50

Since Inception 15.6% 14.9% 14.7% 21.4% 20.7% 21.4% 0.73 0.72 0.69

15 years 18.4% 16.9% 15.6% 18.6% 17.5% 18.0% 0.99 0.97 0.87

10 years 16.2% 15.8% 14.2% 17.5% 16.2% 16.5% 0.93 0.97 0.86

5 years 21.2% 17.2% 15.3% 18.9% 18.4% 19.0% 1.12 0.93 0.80

3 years 25.4% 19.3% 16.3% 14.7% 13.8% 13.7% 1.73 1.40 1.20

1 year 55.0% 40.5% 30.1% 10.9% 10.0% 9.7% 5.03 4.03 3.11

NIFTY India Manufacturing Index has outperformed broader Indian Equity Markets in the long term

Data as on 28 March 2024

Source: MFI Explorer
02
29
€ 

Risks Mitigants
Slowdown in domestic and/or global With India emerging as the largest source of cost
growth could impact revenue and effective labor supply its manufacturing value
profit growth proposition should allow it to be able to grow faster
than rest of the world

Pace of reforms and implementation of

Indian government policies for manufacturing
policy initiatives could slow down or sector are favourable to the industry
turn adverse

Geopolitical developments impacting Continued focus on diversification of supply chain

the availability of raw materials and efforts toward localisation should help over time

Automation and/or AI could lead to slower job creation,

Impact of Automation and AI however, it is likely to bring overall cost down there by
increasing affordability across goods and services

Risks around meeting ESG

Bottom up analysis of ESG risks for investee companies
requirements

02
30
‰ •   Š

‘   ‹ 

Growing Consumption, investments and exports
Changing geopolitical dynamics (China + 1)
Emergence of India as a manufacturing powerhouse

‰  Š
Governments' push for self-reliance (Atmanirbhar Bharat) by way
of reforms and incentives
Supportive macroeconomic environment with rising capex, low leverage
and high levels of capacity utilisation
Emergence of India as the largest pool of cost-effective labor supply
Global realignment of supply chains
High value-add manufacturing should accelerate, supported by
dominance of a strong high end service economy

02
31
 

Rakesh Sethia is a Fund Manager and Senior Equity Analyst and has collectively over 19 years of
experience, of which 17 years in Equity research and 2 years in other corporate roles. In the
current role, he covers Energy, Telecom, Logistics and Transportation and Consumer durables.

He joined HDFC Asset Management Company Ltd in May-2020. Prior to that, he worked and 11
years at Morgan Stanley group and 2 years in HSBC Securities and Capital Markets where he was
leading equity research of Oil & Gas and telecom sectors.

Rakesh has done MBA in Finance from NMIMS, Mumbai in 2007. Rakesh is also a CFA Charterholder
and certified FRM

02
32


Particulars HDFC Manufacturing Fund

Type of Scheme An open ended equity scheme following manufacturing theme

Investment Objective To provide long-term capital appreciation by investing predominantly in equity and equity related securities of companies engaged in the
manufacturing activity. There is no assurance that the investment objective of the Scheme will be realized.

Benchmark Index Nifty India Manufacturing Index (TRI)

Fund Manager $ Mr. Rakesh Sethia

• Direct Plan
Investment Plans
• Regular Plan

Investment Options Under Each Plan: Growth, Income Distribution cum Capital Withdrawal – Payout and Reinvestment of IDCW

During NFO Period

Minimum Purchase / Switches: Rs. 100/- and any amount thereafter
Application Amount During continuous offer period (after scheme re-opens for repurchase and sale):
Purchase / Additional Purchase / Switch: Rs. 100/- and any amount thereafter

Entry Load : Nil

Exit Load : In respect of each purchase/switch-in of units, an Exit load of 1% is payable if units are redeemed/switched-out within
1 month from the date of allotment.
Load Structure No Exit Load is payable if units are redeemed / switched-out after 1 month from the date of allotment.
No Entry / Exit Load shall be levied on bonus units and Units allotted on Re-investment of Income Distribution cum Capital Withdrawal.
In respect of Systematic Transactions such as SIP, Flex SIP, STP, Flex STP, Swing STP, Exit Load, if any, prevailing on the date of registration
/ enrolment shall be levied.

For further details, refer Scheme Information Document and Key Information Memorandum and addenda thereto available on www.hdfcfund.com and at Investor
Service Centres of HDFC Mutual Fund.
$Dedicated fund manager for overseas investments Mr. Dhruv Muchhal
02
33
  

Under normal circumstances, the asset allocation (% of Net Assets) of the Scheme's portfolio will be as follows

Minimum Allocation Maximum Allocation

Types of Instruments Risk Profile
(% of Net Assets) (% of Net Assets)

Equity and Equity related instruments of companies

80 100 Very High
in engaged in manufacturing theme

Equity and Equity related instruments of companies

0 20 Very High
other than above

Units of REITs and InvITs 0 10 Medium to High

Debt securities*, money market instruments

0 20 Low to Medium
and Fixed Income Derivatives

Units of Mutual Fund @ 0 20 Low to High

@ The Scheme may invest in the schemes of Mutual Funds in accordance with the applicable extant SEBI (Mutual Funds) Regulations as amended from time to time.
* including securitised debt, other structured obligations (SO), credit enhanced debt (CE), debt instruments with special features such as subordination to equity
(absorbs losses before equity capital) and /or convertible to equity upon trigger of a prespecified event for loss absorption (also referred to as “perpetual debt instruments”).

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­‡Ž€  

This product is suitable for investors who are seeking*: Riskometer#

• To generate long-term capital appreciation

• Investment predominantly in equity & equity related securities of

companies engaged in the manufacturing theme.

*Investors should consult their financial advisers, if in doubt about

whether the product is suitable for them.
#The product labeling assigned during the NFO is based on internal
assessment of the scheme characteristics or model portfolio and the
same may vary post NFO when the actual investments are made.
For latest riskometer, investors may refer to the Monthly Portfolios
disclosed on the website of the Fund viz. www.hdfcfund.com.

The Scheme being thematic in nature carries higher risks versus diversified equity mutual funds on account of concentration and
sector specific risks.

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The views expressed herein are as of 8th April, 2024 and are based on internal data, publicly available information and other sources believed
to be reliable. Any calculations made are approximations, meant as guidelines only, which you must confirm before relying on them. The
information contained in this document is for general purposes only and not an investment advice. The document is given in summary form
and does not purport to be complete. The document does not have regard to specific investment objectives, financial situation and the
particular needs of any specific person who may receive this document. The information/ data herein alone are not sufficient and should not
be used for the development or implementation of an investment strategy. The statements contained herein are based on our current views
and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from
those expressed or implied in such statements. Stocks/Sectors referred are illustrative and should not be construed as an investment advice
or a research report or a recommendation by HDFC Mutual Fund (“the Fund”) / HDFC AMC to buy or sell the stock or any other security covered
under the respective sector/s. The Fund may or may not have any present or future positions in these sectors. Past performance may or may
not be sustained in future and is not a guarantee of any future returns. HDFC AMC / HDFC Mutual Fund is not guaranteeing / offering /
communicating any indicative yield on investments made in the scheme(s). Neither HDFC AMC and HDFC Mutual Fund (the Fund) nor any
person connected with them, accepts any liability arising from the use of this document. The recipient(s) before acting on any information
herein should make his/her/their own investigation and seek appropriate professional advice and shall alone be fully responsible / liable
for any decision taken on the basis of information contained herein.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

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