Here is another surprise. After a gap of more than 2 months, a new Fixed Maturity Plan (FMP) has been launched.
ICICI Prudential Mutual Fund has come out with ICICI Pru FMP Series 49 - Plan A. The fund has a tenure of one year and is open for subscription from June 25, 2009 to June 29, 2009.
The October crisis in the mutual fund (MF) industry had forced the market regulator, Securities and Exchange Board of India (SEBI), to mandate listings of FMPs on stock exchanges and banning the practice of disclosing 'indicative yields'.
It was enough to dry up new FMP launches for some time. But FMPs rose up, phoenix-like, when launches in this class of funds came up fast and furious in March 2009. It renewed some hope of a revival of FMPs, though the month of April saw just two new FMPs and none were launched in May.
But the assets mopped up by new launches do not really suggest that FMPs are out of demand or out of reckoning, as yet. Under the new rulings, they in fact fit the investors' needs better than earlier.
As such, FMPs have seen fresh investments of more than Rs 6,000 crore under the new rulings mandated by SEBI. A plan from Reliance MF, Reliance FHF XII - Series 4 grabbed as much as Rs 2,000 crore in March, 2009.
FMPs, largely popular among the institutional investors, currently manage Rs 42,870 crore. They are fulfilling an important need of investors in terms of being tax efficient aside from providing predictable returns from fixed income instruments.
Events suggest that FMPs are slowing down, but they are surely going to be in demand.