Baroda BNP Paribas Mutual Fund has launched its new fund offer (NFO), Baroda BNP Paribas Energy Opportunities Fund. This NFO has opened from 21st January. This NFO will remain open for subscription till 4 February 2025. That means investors can invest money in it till 4th February. The scheme will provide investors with an opportunity to earn from the ever-growing energy sector as India transitions from a developing to a developed economy. India’s gross domestic product (GDP) is expected to grow by 1.9 times in the next 5 years, hence India’s energy demand is also likely to increase by 1.7 times. Due to this, the demand for energy in the country will increase rapidly in the coming days.
Demand for energy is increasing in India
In China, between 2003 and 2023, per capita energy consumption increased from 1.5 megawatt hours (MWh) to 6.6 megawatt hours (MWh), reflecting strong growth linked to GDP expansion. Similarly, energy consumption in South Korea has also kept pace with per capita growth in GDP. India is now on a similar growth path, with widespread demand for energy across homes, agriculture, industry, commercial establishments and infrastructure.
Where will the fund money go?
To meet the demand of the economy, sources of energy include coal, crude oil, gas, nuclear, solar, wind, hydro, geothermal and hydrogen. Baroda BNP Paribas Energy Opportunities Fund will allocate at least 80 per cent of its assets to equity options of companies of all market capitalizations involved in exploration, production, distribution, transportation and processing of traditional and new energy. The scheme will focus on investment opportunities in the traditional energy chain as well as new energy transition. Indian energy demand is a secular story, driven by the doubling of the size of India’s middle class, lifestyle changes driven by higher incomes and the energy transition.
historically strong performance
Research conducted by Baroda BNP Paribas AMC highlights that Nifty Energy TRI has outperformed Nifty 500 TRI over the 3, 5, 7 and 10 year periods ending December 31, 2024. This shows the potential of the energy theme to outperform over the long term, which could deliver better returns for investors over time. Suresh Soni said that our Baroda BNP Paribas Energy Opportunities Fund can be considered ideal for equity investors with a holding period of 3 years or more. In line with the Government’s focus on this key sector, several Central Government schemes to promote the energy sector are currently underway, including Production Linked Incentive (PLI) on High Efficiency Solar Modules, National Solar Mission Rooftop Scheme, , Viability Gap Funding for Battery Energy Storage Systems and National Green Hydrogen Mission.
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