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Name of the Asset Management Company:
ICICI Prudential Asset Management Company Limited
Name of the Mutual Fund: ICICI Prudential Mutual Fund
KEY INFORMATION MEMORANDUM
ICICI Prudential Fixed Maturity Plan - Series 88 – 125 Days Plan H
(A Close-Ended Debt Scheme.A relatively Low interest rate risk and
Moderate credit risk)
This Product is suitable for investors who are
seeking*:
Riskometer#
• Savings solution having a duration of 125
days.
• A Debt Scheme that seeks to generate
income by investing in a portfolio of fixed
income securities/debt instruments
maturing on or before the maturity of the
Scheme.
*Investors should consult their financial advisers if in doubt about whether
the product is suitable for them
SCHEME CODE - ICIC/C/D/FTP/21/12/0159
As per SEBI Circular dated, June, 07, 2021, the potential risk class matrix based
on interest rate risk and credit risk, is as below:
Offer for units of Rs.10 each during the New Fund Offer Period only.
#It may be noted that the scheme risk-o-meter specified above is based on the
internal assessment of scheme characteristics and may vary post NFO, when the
actual investments are made. The same shall be updated in accordance with
provisions of SEBI circular dated October 5, 2020 on Product labelling in mutual
fund schemes on ongoing basis.
Being a close-ended Scheme, the Scheme will not reopen for subscriptions. The
Scheme is proposed to be listed on BSE Limited (BSE).
New Fund Offer opens New Fund Offer closes*
November 30, 2022 December 13, 2022
*The AMC reserves the right to extend or pre close the New Fund Offer (NFO)
period, subject to the condition that the NFO Period including the extension, if
any, shall not be for more than 15 days or such period as allowed by SEBI. The
AMC shall publish an addendum to this effect on the website of the AMC and in
one national and one regional newspaper of region where the Head office of
AMC is situated.
Sponsors: ICICI Bank Limited: ICICI Bank Tower, Near Chakli Circle, Old
Padra Road, Vadodara - 390 007, Gujarat, India; and
Prudential plc (through its wholly owned subsidiary, Prudential
Corporation Holdings Limited): Laurence Pountney Hill,
London EC4R OHH, United Kingdom
Trustee : ICICI Prudential Trust Limited
Corporate Identity Number: U74899DL1993PLC054134
Regd. Office: 12th Floor, Narain Manzil, 23, Barakhamba Road,
New Delhi-110 001.
Investment
Manager:
ICICI Prudential Asset Management Company Limited
Corporate Identity Number: U99999DL1993PLC054135
Regd. Office: 12th Floor, Narain Manzil, 23, Barakhamba Road,
New Delhi-110 001.
Corporate Office: One BKC 13th Floor, Bandra Kurla Complex,
Mumbai - 400051.,
Tel: +91 22 2652 5000 Fax: +91 22 2652 8100, website:
www.icicipruamc.com, email id: enquiry@icicipruamc.com
Central Service Office: 2nd Floor, Block B-2, Nirlon Knowledge
Park, Western Express Highway, Goregaon (East), Mumbai 400
063. Tel: (91) (22) 26852000, Fax: (91)(22) 2686 8313.
Website:www.icicipruamc.com
Email id: enquiry@icicipruamc.com
This Key Information Memorandum (KIM) sets forth the information, which a
prospective investor ought to know before investing. For further details of the
Scheme/Mutual Fund, due diligence certificate by AMC, Key Personnel,
Investor's rights & services, risk factors, penalties & litigations etc. investor
should, before investment, refer to the Scheme Information Document (SID)
and Statement of Additional Information (SAI) available free of cost at any of
the Investor Service Centre or distributors or from the website
www.icicipruamc.com
The particulars of ICICI Prudential Fixed Maturity Series – Series 88 – 125 Days
Plans H, the mutual fund Scheme offered under this KIM, have been prepared
in accordance with the Securities and Exchange Board of India (Mutual Funds)
Regulations, 1996, as amended till date, and filed with the Securities and
Exchange Board of India (SEBI), and the Units being offered for public
subscription have not been approved or disapproved by the SEBI nor has the
SEBI certified the accuracy or adequacy of this KIM.
The mutual fund or AMC and its empanelled brokers have not given and shall
not give any indicative portfolio and indicative yield in any communication, in
any manner whatsoever. Investors are advised not to rely on any
communication regarding indicative yield/portfolio with regard to the scheme.
Disclaimer of BSE Limited
It is to be distinctly understood that the permission given by BSE Limited should
not in any way be deemed or construed that the SID has been cleared or
approved by BSE Ltd. nor does it certify the correctness or completeness of any
of the contents of the SID. The investors are advised to refer to the SID for the
full text of the Disclaimer clause of the BSE Limited.
INVESTMENT OBJECTIVE:
The investment objective of the Scheme is to seek to generate income by
investing in a portfolio of fixed income securities/ debt instruments maturing on
or before the maturity of the Scheme.
However, there can be no assurance or guarantee that the investment objective
of the Scheme would be achieved.
ASSET ALLOCATION PATTERN:
Under normal circumstances, the asset allocation of the Scheme and the credit
rating of the instruments would be as follows:
Instruments Indicative allocations
(% of total assets)
Risk Profile
Maximum Minimum High/Medium/Low
Money Market
Instruments, Debt
Instruments* including
Government Securities
100 0 Low to Medium
Note: The Plans under the Scheme will not have any exposure to derivatives.
*If a Plan decides to invest in securitized debt (Single loan and / or Pool loan
Securitized debt), it could be up to 25% of the corpus of the Plan.
* If a Plan decides to invest in Structured Obligation/ Credit enhancement (oth
er than securitized debt instruments, as defined in SEBI (Public Offer and Listin
g of Securitized Debt Instruments) Regulations 2008, it could be up to 10% of t
he corpus of the Plan.
The cumulative gross exposure through debt and money market instruments
and other permitted securities/assets and such other securities/assets as may be
permitted by the Board from time to time, subject to prior approval from SEBI, if
any should not exceed 100% of the net assets of the scheme.
In the event of any deviation from the asset allocation table stated above the
Fund Manager shall review and rebalance the portfolio within 30 business days
from the date of the said deviation except to the extent provided in SEBI circular
No. SEBI/HO/IMD/IMD-II DOF3/P/CIR/2022/39 dated March 30, 2022 or such
other clarifications provided by SEBI/AMFI from time to time.
The Scheme will have exposure to the following instruments:
Credit Rating
Instruments
AAA#/A1
Certificate of Deposits (CDs) 45-50%
Commercial Papers (CPs) 25-30%
Non-Convertible Debentures (NCDs) 25-30%
#Or equivalent short term rating.
1. The Scheme shall endeavour to invest in instruments having credit rating as
indicated above or higher.
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RISK PROFILE OF THE SCHEME: Mutual Fund Units involve investment risks
including the possible loss of principal. Please read the SID carefully for details
on risk factors before investment. Scheme Specific Risk Factors summarised
below.
Scheme Specific Risk Factors and Risk Management Strategies:
Some of the specific risk factors related to the Scheme include, but are not
limited to the following:
Risks associated with Investing in Fixed Income Securities:
Market Risk: The Net Asset Value (NAV) of the Scheme(s), to the extent invested
in fixed income securities, will be affected by changes in the general level of
interest rates. The NAV of the Scheme(s) is expected to increase from a fall in
interest rates while it would be adversely affected by an increase in the level of
interest rates.
Liquidity Risk: The liquidity of a security may change depending on market
conditions leading to changes in the liquidity premium linked to the price of the
security. At the time of selling the security, the security can become illiquid
leading to loss in the value of the portfolio.
Credit Risk: Investments in fixed income securities are subject to the risk of an
issuer's inability to meet interest and principal payments on its obligations and
market perception of the creditworthiness of the issuer.
Price Risk: Government securities where a fixed return is offered run price-risk
like any other fixed income security. Generally, when interest rates rise, prices of
fixed income securities fall and when interest rates drop, the prices increase. The
extent of fall or rise in the prices is a function of the existing coupon, days to
maturity and the increase or decrease in the level of interest rates. The new level
of interest rate is determined by the rates at which government raises new
money and/or the price levels at which the market is already dealing in existing
securities. The price-risk is not unique to Government Securities. It exists for all
fixed income securities. However, Government Securities are unique in the
sense that their credit risk generally remains zero. Therefore, their prices are
influenced only by movement in interest rates in the financial system.
Reinvestment Risk: This risk refers to the interest rate levels at which cash flows
received from the securities in the Scheme are reinvested. The additional
income from reinvestment is the “interest on interest” component. The risk is
that the rate at which interim cash flows can be reinvested may be lower than
that originally assumed.
Regulatory Risk: Changes in government policy in general and changes in tax
benefits applicable to Mutual Funds may impact the returns to investors in the
Scheme.
Risks associated with investment in unlisted securities: Except for any security
of an associate or group company, the scheme has the power to invest in
securities which are not listed on a stock exchange (“unlisted Securities”) which
in general are subject to greater price fluctuations, less liquidity and greater risk
than those which are traded in the open market. Unlisted securities may lack a
liquid secondary market and there can be no assurance that the Scheme will
realize their investments in unlisted securities at a fair value. The AMC may
choose to invest in unlisted securities that offer attractive yields. This may
increase the risk of the portfolio.
Settlement risk: The inability of the Schemes to make intended securities
purchases due to settlement problems could cause the Schemes to miss certain
investment opportunities. By the same rationale, the inability to sell securities
held in the Schemes’ portfolio due to the extraneous factors that may impact
liquidity would result, at times, in potential losses to the Scheme, in case of a
subsequent decline in the value of securities held in the Schemes’ portfolio.
Different types of fixed income securities in which the Scheme(s) would invest
as given in the Scheme Information Document carry different levels and types of
risk. Accordingly, the Scheme(s) risk may increase or decrease depending upon
its investment pattern. e.g. corporate bonds carry a higher level of risk than
Government securities.
The AMC may, considering the overall level of risk of the portfolio, invest in
lower rated / unrated securities offering higher yields as well as zero coupon
securities that offer attractive yields. This may increase the absolute level of risk
of the portfolio.
As zero coupon securities does not provide periodic interest payments to the
holder of the security, these securities are more sensitive to changes in interest
rates. Therefore, the interest rate risk of zero coupon securities is higher. The
AMC may choose to invest in zero coupon securities that offer attractive yields.
This may increase the risk of the portfolio.
Securities, which are not quoted on the stock exchanges, are inherently illiquid
in nature and carry a larger amount of liquidity risk, in comparison to securities
that are listed on the exchanges or offer other exit options to the investor,
including a put option. The AMC may choose to invest in unlisted securities that
offer attractive yields. This may increase the risk of the portfolio.
Investment in unrated instruments may involve a risk of default or decline in
market value higher than rated instruments due to adverse economic and issuer- specific developments. Such investments display increased price sensitivity to
changing interest rates and to a deteriorating economic environment. The
market values for unrated investments tends to be more volatile and such
securities tend to be less liquid than rated debt securities"
Changes in government policy in general and changes in tax benefits applicable
to Mutual Funds may impact the returns to investors in the Schemes.
Risks associated with investing in Tri Party Repo through CCIL (TREPS)
The mutual fund is a member of securities segment and Tri-party Repo trade
settlement of the Clearing Corporation of India (CCIL). All transactions of the
mutual fund in government securities and in Tri-party Repo trades are settled
centrally through the infrastructure and settlement systems provided by CCIL;
thus reducing the settlement and counterparty risks considerably for transactions
in the said segments.
CCIL maintains prefunded resources in all the clearing segments to cover
potential losses arising from the default member. In the event of a clearing
member failing to honour his settlement obligations, the default Fund is utilized
to complete the settlement. The sequence in which the above resources are used
is known as the “Default Waterfall”.
As per the waterfall mechanism, after the defaulter’s margins and the defaulter’s
contribution to the default fund have been appropriated, CCIL’s contribution is
used to meet the losses. Post utilization of CCIL’s contribution if there is a
residual loss, it is appropriated from the default fund contributions of the non- defaulting members.
Thus the scheme is subject to risk of the initial margin and default fund
contribution being invoked in the event of failure of any settlement obligations. In
addition, the fund contribution is allowed to be used to meet the residual loss in
case of default by the other clearing member (the defaulting member).
However, it may be noted that a member shall have the right to submit
resignation from the membership of the Security segment if it has taken a loss
through replenishment of its contribution to the default fund for the segments
and a loss threshold as notified have been reached. The maximum contribution
of a member towards replenishment of its contribution to the default fund in the
7 days (30 days in case of securities segment) period immediately after the afore- mentioned loss threshold having been reached shall not exceed 5 times of its
contribution to the Default Fund based on the last re-computation of the Default
Fund or specified amount, whichever is lower.
Further, it may be noted that, CCIL periodically prescribes a list of securities
eligible for contributions as collateral by members. Presently, all Central
Government securities and Treasury bills are accepted as collateral by CCIL. The
risk factors may undergo change in case the CCIL notifies securities other than
Government of India securities as eligible for contribution as collateral.
Risk Factors associated with schemes investing in Gilt Securities
Generally, when interest rates rise, prices of fixed income securities fall and
when interest rates drop, the prices increase. The extent of fall or rise in
prices is a function of the existing coupon, days to maturity and the
increase or decrease in interest rates. Price-risk is not unique to
government securities but is true for all fixed income securities. The default
risk however, in respect of Government securities is zero. Therefore, their
prices are influenced only by movement in interest rates in the financial
system. On the other hand, in the case of corporate or institutional fixed
income securities, such as bonds or debentures, prices are influenced by
credit standing of the issuer as well as the general level of interest rates.
Even though the Government securities market is more liquid compared to
other fixed income instruments, on occasions, there could be difficulties in
transacting in the market due to extreme volatility or unusual constriction in
market volumes or on occasions when an unusually large transaction has to
be put through.
Risk associated with close ended Schemes:
A close ended Scheme endeavours to achieve the desired returns only at the
scheduled maturity of the Scheme. Investors who wish to exit/redeem before the
scheduled maturity date may do so through the stock exchange mode, if they
have opted to hold Units in a demat form, by mentioning their demat details on
the NFO application form. For the units listed on the exchange, it is possible that
the market price at which the units are traded may be at a discount to the NAV of
such Units. Hence, Unit Holders who sell their Units in a Scheme prior to maturity
may not get the desired returns.