Motilal Oswal Asset Management Company (MOAMC) on Friday announced the launch of its latest fund offer, the Motilal Oswal Digital India Fund.
The fund is an open-ended equity scheme investing in Digital Space, focusing on Technology, Telecom, Media, Entertainment, and other related ancillary sectors for investors who want long-term capital appreciation.
The NFO opened on October 11, 2024, and closes on October 25. Senior officials clarified that the funds mopped up through this NFO will be invested only in digital companies and not in IT services providers.
Prateek Agrawal, MD and CEO of Motilal Oswal AMC said, “Digital space is a theme that we have been focused on and finds representation in most of our diversified funds. Now, we are bringing a fund focused on the theme. The fund is tailored for investors seeking capital appreciation over the long term by investing predominantly in equities and equity-related instruments of digital and technology-related companies.”
He highlighted that India’s internet economy is expected to grow rapidly, as is the case in the US, China and around the world.
Niket Shah, Chief Investment Officer of Motilal Oswal AMC, said, “India is poised to become a world leader in digital infrastructure and deployment. Compared to the United States, India has reached a tipping point in the
digital space, with an expected estimated 10 percent e-retail penetration by 2027. However, there is a long runway for tech growth in India, as none of the top ten stocks in the country are digital, and only two are in the IT sector”.
Shah said the IT sector’s representation in India is currently very low in comparison to the global market, which presents a huge opportunity for growth.
Varun Sharma, Exec Grp VP, MOAMC, highlighted that Digital ecosystem in India is estimated to grow to $900-$1,000 billion by 2030, compared to $155-175 billion in 2022.
Sharma added that digital intensity is increasing with time. The average Indian spends 6 hours and 45 minutes daily online, connected through multiple digital devices.
He added that as a higher share of productive time is spent online daily, a higher share of wallet is likely to be spent online over time.
Digital technology is penetrating newer industries at an accelerated pace, and the young generation is very well-versed in digital apps. These trends further reinforce the growth potential of native digital businesses in India, Sharma added.
Digital payments have become a central modus operandi for most transactions, especially in rural India, where 38 percent of users use digital payments. The average Indian spends approximately 6 hours and 45 minutes online daily, with the highest traffic on e-commerce websites, social media platforms, and online marketplaces, among other places.
Over the last five years, SaaS companies, B2B online platforms, digital ads, the software industry, Fintech, Foodtech, Insurtech, and digital logistics have all experienced significant growth in industry size and revenue. This has resulted in creating an exponential digital opportunity that is valued to be about $900 billion..