Templeton India Growth: Invest

Recommendation: Invest

Aarati Krishnan

FRESH investments in the Templeton India Growth Fund may be contemplated with a three-year horizon. After an unimpressive run in the earlier years, Templeton India Growth Fund fared quite well in the bear markets of 2000 and 2001.

The value-investing style has paid off well in the aftermath of the technology stock meltdown and the fund has been in a position to capitalise on this.

Between June 30 and September 30 2001, the fund appears to have cut back in its pharma exposures while stepping up its exposure to software stocks. The following changes were made in the portfolio:

Stocks added: Bajaj Auto and Zee Telefilms were the two rather unusual additions to the portfolio in the quarter. Both appear to have paid off, registering a significant appreciation in value since September 2001.

Stocks sold out: The fund completely sold out its holdings in Hindustan Petroleum, NIIT and SSI during the quarter.

Holdings enhanced: The fund added substantially to its holdings in a range of technology stocks-Infosys, Hughes Software, and Satyam Computers. Each of these has registered a significant price appreciation since September 2001.

Holdings trimmed: Ranbaxy and Cipla were two key holdings where the fund appears to have booked profits. The fund could have trimmed these holdings to lock into the high returns they offered in recent months. But the reduced exposures to Ranbaxy would have made the fund miss out on the appreciation in the stock since September. Among old economy stocks, the fund has trimmed exposures to Reliance, Grasim, BPCL, HDFC, NALCO, BHEL, Titan and Nestle India.

Fund facts: Templeton India Growth Fund launched in 1997, is an open end fund intended to follow a value investing strategy. The fund is managed by Dr J. Mark Mobius. It carries a minimum investment limit of Rs 2,000.

The fund charges an entry load of 2 per cent for those investing less than Rs 2 lakh and 1 per cent for those investing between Rs 2 and Rs 25 lakh. Its net assets were Rs 111 crore at end-September. The NAV is Rs 11.23 per unit.