ICICI Prudential Launches Nifty Private Bank Index Fund to Offer Exposure to India’s Top Private Banks

The New Fund Offer (NFO) will be open from July 1 to July 14, 2025.

ICICI Prudential Mutual Fund has launched the ICICI Prudential Nifty Private Bank Index Fund, an open-ended index scheme that aims to mirror the performance of the Nifty Private Bank TRI. The New Fund Offer (NFO) will be open from July 1 to July 14, 2025.

This index fund provides investors with direct exposure to India’s top 10 private sector banks selected from the Nifty 500 based on free-float market capitalisation. In FY2025, these banks contributed 37 per cent of the Nifty 50’s total profits, despite forming only 28 per cent of its market capitalisation.

According to Abhijit Shah, Chief Marketing and Digital Business Officer at ICICI Prudential AMC, the fund allows investors to participate in the strength of India’s private banking sector in a cost-effective and transparent way. Private banks have demonstrated strong profitability, capital adequacy, and asset quality.

Growth and Fundamentals of Private Banks
Private banks’ share in the Indian credit market increased from 13 per cent in FY2005 to 36 per cent in FY2025, while their deposit market share rose from 11 per cent to 32 per cent over the same period.

The Nifty Private Bank Index outperformed the Nifty 50 TRI with a 3-year CAGR of 19.7 per cent, compared to 18.5 per cent for the Nifty 50 TRI.

Private banks currently trade at a price-to-earnings (P/E) ratio of 17.6, compared to 22.3 for the Nifty 50, and a price-to-book (P/B) ratio of 2.4, compared to 3.6 for the Nifty 50.

Net Interest Income (NII) and Net Interest Margin (NIM) have improved significantly, rising from around Rs 50,000 crore in FY2005 to nearly Rs 4,00,000 crore in FY2025, with NIM reaching 4.6 per cent.

Capital adequacy stands at 17.29 per cent, while net non-performing assets (NPAs) have declined to 0.50 per cent, a 10-year low.

Scheme Highlights:

• Investment Strategy: Passive index-tracking

• Benchmark: Nifty Private Bank TRI

• Fund Managers: Mr. Nishit Patel and Ms. Ashwini Shinde

• Exit Load: Nil

• Minimum Investment: Rs 1,000 (SIP and STP options available)

• SIP Options:

  • Daily/Weekly/Fortnightly/Monthly: Rs 1,000 (minimum 6 installments)

  • Quarterly: Rs 1,000 (minimum 4 installments)

• Availability: Open to both demat and non-demat account holders

Disclaimer: Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully.