Invesco India PSU Equity Fund - (An open ended equity scheme following PSU theme) - Invesco Mutual Fund
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Invesco India PSU Equity Fund
(An open ended equity scheme following PSU theme)
Suitable for investors who are seeking*:
capital appreciation over long-term
investments predominantly in equity and equity-related
instruments of Government companies (PSU’s)
* Investors should consult their financial advisers if in doubt
about whether the product is suitable for them
Why PSUs make a compelling investment opportunity?
1. Operate in ‘Cyclical’ Core sectors - Majority of PSUs operate in the ‘Cyclical’ core sectors,
which benefit from pickup in economic activity.
2. Unique propositions/ first mover advantages – Many PSU companies have unique
proposition either because of access to resources or first mover advantage.
3. Beneficiary of government policy initiatives- PSU companies are beneficiary of
Governments’ strategic interest and reforms. Example - greater autonomy to Oil Marketing
Companies (OMCs), strengthening of legal framework to debt resolution/recovery, etc.
4. Improvement in share holder rewards generally in form of dividend and buy-backs-
Improving shareholder rewards through share buy-back & dividends, which helps to further
strengthen Return on Equity (RoE).
5. ‘Monetise or modernize’ - Higher fiscal deficit would require support from disinvestment,
which can unlock value for shareholders. The Government is also emphasizing on
modernization, which if materialized can add significant value.
6. Favorable valuations1- PSU stocks are presently much cheaper relative to the broad market -
61% discount to S&P BSE Sensex.
1Data as at February 28, 2021. Please refer slide ‘Favorable valuations’ for details.
2
1. PSUs - Operate in cyclical ‘core’ sectors
These sectors tend to benefit as economic recovery picks up
S&P BSE PSU Invesco India PSU Equity Fund S&P BSE Sensex
1%
2%
1% 2%
3% 3% 3% 2%
5%
12%
10%
29% 7%
35%
8% 43%
12%
23%
13%
15%
26%
25% 17%
Financials
Financials Utilities Information Technology
Energy Financials Energy
Utilities Consumer Staples
Industrials Consumer Discretionary
Industrials Materials Industrials
Materials Energy Communication Services
Consumer Discretionary Health Care
Consumer Discretionary Utilities
Cash & Cash Equivalent Materials
S&P BSE PSU & the Fund hold stocks largely operating in the cyclical sectors as compared to Sensex that has only 26% of its
constituents from the cyclical sectors
Source: Bloomberg. Internal. Data as on 28 February 2021. Benchmark- S&P BSE PSU TRI.
Disclaimer: The sectors referred above are for information and / or illustration purpose only and should not be construed as recommendation from Invesco Asset Management (India)
Private Limited/Invesco Mutual Fund. The Scheme may or may not have any present or future positions in these sectors.
3
2. PSUs offer unique propositions and can have first
mover advantage
Companies Key investment proposition
Hindustan Petroleum Corporation (HPCL), Bharat Large non-replicable fuel retail network
Petroleum Corporation (BPCL), Indian Oil Corporation
(IOC)
GAIL, Indraprastha Gas, Mahanagar Gas, Petronet Large non-replicable gas network
LNG, Gujarat State Petronet
Indian Railway Catering &Tourism Corporation Railway e-ticketing exclusivity
(IRCTC)
Container Corporation of India Large non-replicable container logistics network
Coal India Largest coal reserves
Manganese Ore (India) (MOIL) Largest manganese reserves in India
Steel Authority of India Limited (SAIL) Captive iron ore mines
State Bank of India (SBI) Largest branch network
National Thermal Power Corporation (NTPC) Largest thermal power capacity with linkage to low cost coal
Power Grid Large non-replicable power grid network
Mishra Dhatu Nigam Indigenous source of high value metals for industries like defense
and space where private participation is restricted due to critical
nature / national interest
Cochin Shipyard Indigenous shipyard for naval ships where private participation is
restricted due to critical nature / national interest
Source: Invesco Asset Management (India)
Disclaimer: The stocks / sectors referred above should not be construed as recommendations, advice to buy, sell or in any manner transact in this stock and neither should it be
considered as Research Report from Invesco Asset Management (India) Private Limited and/or Invesco Mutual Fund. The Scheme may or may not have any present or future positions in
these stocks / sectors. The above portfolio allocation is subject to change without any prior notice.
4
3. PSUs- beneficiaries of government’s policy initiatives Few reform initiatives which help PSUs Fuel price deregulation Direct Benefit Transfer Pradhan Mantri Jandhan Yojna Pradhan Mantri Aawas Yojna Ujjwal DISCOM Assurance Yojana Pradhan Mantri Ujwalla Yojana Insolvency and Bankruptcy Code Atmanirbhar Bharat 5
4. PSUs - Improvement in share holder rewards in form of
dividend and buy-backs
Dividend in %
60%
57.19%
54.52%
50%
52.59%
47.16%
43.94%
40%
41.39%
36.50%
34.39%
30%
32.26%
30.55%
29.33%
28.12%
20%
10%
0%
FY 15 FY 16 FY 17 FY 18 FY19 FY20
S&P BSE PSU S&P BSE Sensex
Past performance may or may not be sustained in future.
Source: Bloomberg.
Disclaimer: The above details are for information and / or illustration purpose only.
6
5. PSUs- beneficiaries of government’s disinvestment agenda
Value unlocking opportunity for investors
The government has made a strong pitch for privatisation of public sector units saying
that “government has no business to be in business’’, emphasizing on mantra of
‘Monetise or Modernise’
In FY18 and FY19, Government has been able to meet its divestiture target
Government has raised ~Rs 4.9 trillion worth so far; of which Rs 2.35 trillion was
divested in just last three years.
22 new IPO’s have come for listing over past five years which have offered new
investment avenues for investors
During FY20, Rs. 50,299 crores has been raised through disinvestment transactions
Covid-19 has worsened the fiscal situation and government has limited levers on revenue
receipts. Here, disinvestment programme can come to rescue
Government has set an ambitious disinvestment target of Rs. 1.75 trillion for FY22
Data source: Department of Investment and Public Asset Management (DIPAM)/Union Budget
7
Disinvestment is key strategic priority for the government
amid elevated fiscal deficit
20,000 9.5 10.0
18,000 9.0
16,000 6.8 8.0
14,000 7.0
12,000 4.6 6.0
4.9 4.5
18,487
10,000 5.0
4.1
15,068
8,000 3.9 3.5 3.6 3.5 4.0
6,000 3.0
9,348
6,589
4,000 2.0
6,079
5,356
5,328
5,107
5,029
4,902
2,000 1.0
0 0.0
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21RE
FY22BE
Fiscal deficit (Rs. Billion)- LHS Fiscal Deficit (% of GDP)- RHS
GDP- Gross Domestic Product. BE: Budget Estimates. RE: Revised Estimates. Source: MOFSL- Motilal Oswal Financial Services Ltd.
8
Privatization of PSUs is gaining momentum with
government’s intent of minimizing its presence in non-
strategic sectors
Non- Strategic sectors: CPSEs to be privatized or closed
Atomic energy, Space and
1 Defence
Transport and
Strategic sectors: 2 Telecommunications
Bare minimum presence
of CPSEs Power, Petroleum, Coal and
3 other minerals
4 Banking, Insurance and
financial services
Government objective is to minimize presence of CPSEs including financial
institutions and create new investment space for private sector.
Source: Budget speech. CPSE: Central Government Public Sector Enterprise.
9
Government’s strategic disinvestment policy- key highlights Receipts estimated from disinvestment in BE 2021-22 at Rs. 1,75,000 crores. Government aims to complete a number of divestment transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited among others in 2021-22. To bring the IPO of LIC in 2021-22. To take up the privatization of two Public Sector Banks (other than the IDBI Bank) and one General Insurance company in the year 2021-22. To fast forward the disinvestment policy, NITI Aayog to work out on the next list of Central Public Sector companies that would be taken up for strategic disinvestment. Source: Budget speech. 10
6. Favorable valuations- PSUs are currently trading at a
significant discount relative to Sensex and their long term
valuation multiples
Sensex versus S&P BSE PSU (trailing twelve months) Sensex versus S&P BSE PSU P/B Ratio (trailing twelve months)
(Based on adjusted positive P/E) 4.4
30
3.9
10 Years Average: 2.83x
25
3.4
10 Years Average: 19.81x
20 2.9
2.4
15
10 Years Average: 11.20x
1.9
10 Years Average: 1.37x
10
1.4
5
0.9
0 0.4
Nov-11
Nov-12
Nov-13
Dec-14
Dec-15
Dec-16
Jul-11
Jul-12
Jul-13
Aug-14
Apr-15
Aug-15
Apr-16
Aug-16
Apr-17
May-18
May-19
May-20
Aug-17
Jan-18
Sep-18
Jan-19
Sep-19
Jan-20
Sep-20
Jan-21
Feb-11
Mar-12
Mar-13
Mar-14
Dec-12
Nov-13
Dec-15
Nov-16
Jun-11
Jan-12
May-12
Jun-14
Jan-15
May-15
Jun-17
May-18
Dec-18
Nov-19
Jun-20
Feb-11
Oct-11
Oct-14
Oct-17
Aug-12
Apr-13
Jul-13
Mar-14
Sep-15
Apr-16
Feb-18
Jul-16
Mar-17
Sep-18
Apr-19
Aug-19
Mar-20
Oct-20
Feb-21
PSU Sensex PSU Sensex
Current valuations of PSU index are at 11.98 x (P/E - trailing twelve months) earnings versus 30.40x (P/E - trailing twelve months) earnings for
Sensex; this translates into a 61% discount to S&P BSE Sensex as compared to 43% discount to S&P Sensex for 10 years average.
Current valuations of PSU index are at 1.09x (Price to Book ratio) versus 3.60x (Price to Book ratio) for Sensex; this translates into a 70%
discount to S&P BSE Sensex as compared to 54% discount to S&P Sensex for 10 years average.
Past Performance may or may not be sustained in future.
Source: Bloomberg. Data as at February 28, 2021. The long term average period of 10 years is broadly in line with fund’s tenure.
Note: P/E Valuations are based on adjusted positive P/E, which excludes loss making companies. P/E: Price to earning. P/B: Price to Book.
Disclaimer- The above chart is for illustration purpose only and shouldn’t be used for the development or implementation of an investment strategy. It should not be construed as
investment advice to any party or construed as a promise on minimum returns and safeguard of capital. Invesco Asset Management (India) Pvt. Ltd. is not guaranteeing or promising or
forecasting any returns.
11Presenting Invesco India PSU Equity Fund (An open ended equity scheme following PSU theme)
Invesco India PSU Equity Fund – The Opportunity
Fund owns our high conviction PSU stock ideas, filtered from our
internal stock categorization framework
Value
accretion/
Beneficiaries Improved
Core cyclical Unique new
Attractive of dividend
sector business
valuations government payouts/buy investment
companies prepositions opportunities
policies backs
through
divestment
13Portfolio Construction Guidelines
The fund follows a bottom-up investment approach to select PSU stocks
It takes minimal exposure to stocks having leveraged balance sheet
It strives to select fundamentally sound PSUs that are dominate players and
have the potential to deliver superior growth and ROE
The fund has the flexibility to hold companies which subsequently may get
privatized or where the Government shareholding gets reduced through the
process of divestment
Style neutral approach with no market capitalization bias
ROE- Return on Equity
14Stock Selection : Key to drive Alpha
5 Year CAGR Performance of ‘Stocks’ constituted in the S&P BSE PSU vs. those held in the Invesco India PSU
Equity Fund
S&P BSE PSU Invesco India PSU Equity Fund
60%
45%
40%
40%
35%
30%
20%
25%
20%
0%
15%
10%
-20%
5%
0%
Gujarat Narmada Valley…
Can Fin Homes Ltd
Container Corp Of India Ltd
Petronet LNG Ltd
Indraprastha Gas Ltd
Power Grid Corp Of India Ltd
Gujarat Gas Ltd
Steel Authority Of India
MOIL Ltd
Gujarat State Petronet Ltd
NMDC Ltd
NTPC Ltd
Hindustan Petroleum Corp
Bharat Electronics Ltd
National Aluminium Co Ltd
Bharat Petroleum Corp Ltd
-40%
Gujarat Gas Ltd
ITI Ltd
Hindustan Copper Ltd
Canara Bank
State Bank Of India
MMTC Ltd
NMDC Ltd
Balmer Lawrie & Co Ltd
Bharat Electronics Ltd
Indian Oil Corp Ltd
Sjvn Ltd
Oil & Natural Gas Corp Ltd
IFCI Ltd
National Aluminium Co Ltd
REC Ltd
Shipping Corp Of India Ltd
Bharat Petroleum Corp Ltd
Gail India Ltd
Moil Ltd
NHPC Ltd
Power Grid Corp Of India Ltd
BEML Ltd
Gujarat Mineral Dev Corp Ltd
Engineers India Ltd
NTPC Ltd
Bank Of India
Nlc India Ltd
Oil India Ltd
Hindustan Petroleum Corp
Container Corp Of India Ltd
Mangalore Refinery & Petro
Bank Of Baroda
Coal India Ltd
Jammu & Kashmir Bank Ltd
Chennai Petroleum Corp Ltd
Union Bank Of India
Central Bank Of India
Bharat Heavy Electricals
NBCC India Ltd
Punjab National Bank
Indian Bank
Uco Bank
Steel Authority Of India
Rashtriya Chemicals & Fertilizer
Power Finance Corporation
Bank Of Maharashtra
Indian Overseas Bank
India Tourism Development
Strike Rate:
~100% of the companies held in the Invesco India PSU Equity Fund delivered positive returns over five years
period vs. ~60% of constituents of the S&P BSE PSU
Past performance may or may not be sustained in future. 5 Year CAGR Returns as on Feb 28, 2021. Data source: Bloomberg and Invesco Mutual Fund. BM- Benchmark- S&P BSE
PSU TRI.
The above graph is for illustration purpose only and should not be construed as a promise on minimum returns and safeguard of capital. The performance of above stocks should not be
construed as performance of the Scheme as the Scheme would be constituted of number of stocks having different weights and the individual stock held by the scheme may or may not give
positive returns. Invesco Asset Management (India) Pvt. Ltd. is not guaranteeing or forecasting any returns. Please refer slide on ‘Lumpsum Performance’ for performance of the Scheme.
Disclaimer: The stocks referred above is/are for information and / or illustration purpose only and should not be construed as recommendation from Invesco Asset Management (India)
Private Limited/Invesco Mutual Fund. The Scheme may or may not have any present or future positions in these stocks.
15Our approach to stock selection- government policies and
reforms can be enablers..
Key policy measures and reform initiatives of the government for PSU sector
Diesel price deregulation- The Oil marketing companies’ ROCE rose from 11% in FY14 to 24% in
FY17 with reduction in net debt from 1.5x networth in FY14 to 0.7x networth in FY17
Ujwal DISCOM Assurance Yojana- This led to reduction in DISCOM losses as well as cost of
generation of power
Pradhan Mantri Aawas Yojna- It created construction as well as lending opportunities
Fast tracking approvals accelerated Coal India’s production growth – Coal India’s output which
saw CAGR of 2.4% during FY11-14 moved up to 6.2% during FY14-17.
Introduction of ‘The Insolvency & Bankruptcy Code, 2016’ to facilitate NPA recovery of banks
Focus on gas sector, which led to creation of highly profitable companies like IGL, MGL, Petronet
etc. that have first mover advantage in creating gas infrastructure.
ROCE- Return on Capital Employed. NPA- Non-performing asset.
16.. but reforms, size and competitive advantage may not be
the only elements for stock selection
Few examples- Not all government reforms meet with desired success
Coal India’s output which saw a CAGR of 2.4% during FY11-14 moving up to 6.2% in FY14-17 post
government intervention, but then faltered to 2.8% during FY17-20. Its output reached just 602 mn
tonnes in FY20 as against target of 1 bn tonnes
The PSU bank profitability has remained weak despite various reforms in Banking sector – average
ROE of largest PSU Bank for FY18-20 stands at just 2%
Merely size, government policies and competitive advantage cannot necessarily translate into the
profitability of the company
Particulars Name of the Portfolio Allocation Average Return on Equity
company (Feb-21) (FY18-FY20)
Largest Power Equipment Company BHEL No 0%
Largest Oil Marketing Company IOC No 13%
Largest Upstream Oil Company ONGC No 10%
Thus, we combine government policies and unique advantages with profitability for guiding our
stock selection rather than taking top-down calls on any particular stock
Data source for ROE: Factset. Disclaimer: The stocks / sectors referred above should not be construed as recommendations, advice to buy, sell or in any manner transact in this stock
and neither should it be considered as Research Report from Invesco Asset Management (India) Private Limited and/or Invesco Mutual Fund. The Scheme may or may not have any
present or future positions in these stocks / sectors. The above portfolio allocation is subject to change without any prior notice.
17Execution and Profitability of companies is the key
Examples of our stock selection approach
Dedicated Freight Corridor was conceptualized in 2006 but momentum picked up only a decade later and hence Container
Corporation of India figured in top five only in 2018
Coal India saw initial uptick in production growth, but it faltered and hence we exited the stock
Despite various measures for PSU banks, Return on Equity has remained weak and hence we are very careful and selective in
this sector
Top holdings and portfolio allocation across time frame
Feb 2016 % Allocation Feb 2017 % Allocation Feb 2018 % Allocation
Coal India 11.40% SBI 10.42% Powergrid 10.05%
Powergrid 11.01% IOC 9.52% IOC 9.65%
GSPL 10.29% Powergrid 9.48% ONGC 9.32%
SBI 9.37% Coal India 9.10% Cochin Shipyard 8.06%
HPCL 9.37% NTPC 8.18% BPCL 7.56%
Feb 2019 % Allocation Feb 2020 % Allocation Feb 2021 % Allocation
Powergrid 9.79% NTPC 9.13% Powergrid 8.19%
CONCOR 9.30% SBI 8.89% Bharat Electronics 7.27%
BPCL 8.80% BPCL 8.49% BPCL 6.98%
ONGC 8.66% Powergrid 8.46% Petronet LNG 6.06%
IGL 8.19% Gujarat Gas 8.25% GSPL 5.34%
Diesel Price Deregulation 2014 The above portfolio allocation tables show how fund positions in changing regulatory framework,
but monitors execution & profitability of the company and makes requisite adjustment.
Pradhan Mantri Aawas Yojna 2015 Disclaimer: The stocks / sectors referred above should not be construed as recommendations,
Coal India 1 bn tonne output - 2020 2015 advice to buy, sell or in any manner transact in this stock and neither should it be considered as
Ujwal Discom Assurance Yojana 2015 Research Report from Invesco Asset Management (India) Private Limited and/or Invesco Mutual
Fund. The Scheme may or may not have any present or future positions in these stocks /
Insolvency and Bankruptcy Code 2016
sectors. The above portfolio allocation is subject to change without any prior notice.
Dedicated Freight corridor 2016
Focus on cleaner fuel like gas Continuous efforts
18 Focus on Defence Continuous effortsFund has consistently higher RoE vis-à-vis benchmark
Return on Equity (RoE)- Fund vs Benchmark
19.96%
19.49%
18.45% 18.72%
19.00% 18.34%
17.67% 17.73%
16.97% 16.79%
17.00%
15.02%
15.00%
13.37%
13.00% 12.47%
11.66% 11.88%
11.00%
9.64%
9.00%
7.00%
5.00%
Dec-17 Dec-18 Dec-19 Dec-20 Feb-21
Fund S&P BSE PSU Nifty 50
Data as on February 28, 2021. Source: Factset . Fund- Invesco India PSU Equity Fund. Benchmark (BM) – S&P BSE PSU TRI. Additional Benchmark- Nifty 50 TRI.
Past performance may or may not be sustained in future. Invesco Asset Management (India) Private Limited (IAMI)/ Invesco Mutual Fund is not guaranteeing or promising or
forecasting any returns.
19Fund’s performance attributed to stock selection
Attribution Analysis
Attribution by stock Average Fund Average Attribution Analysis
Weight (%) Benchmark
Selection Effect Allocation Effect Total Effect
Weight (%)
Total 100% 100% 23.47% 4.93% 31.90%
Top stocks BPCL Ltd. 7.96 6.06 6.22% 0.00% 6.22%
IRCTC Ltd. 1.59 0.19 4.61% 0.00% 4.61%
SBI Life 4.56 0.20 3.54% 0.00% 3.54%
Insurance Ltd.
Bottom stocks SBI -4.39% 0.00% -4.39%
4.93 19.69
UTI Asset -2.65% 0.00% -2.65%
Mgmt. Co. Ltd. 0.40
IRFC Ltd. -2.25% 0.00% -2.25%
0.15
Fund’s performance can be largely attributed to overweight positions (vs. benchmark) in select PSU ideas.
Past performance may or may not be sustained in future.
3 Year Attribution as at February 28, 2021Source: Bloomberg
Attribution by stock is based on Portfolio contribution to returns. The above data is based on average of daily values. Top stocks are the stocks which have been major contributor in the
outperformance of the fund over a period of last 3 years, and may have been included in the portfolio during any period of time under analysis. Bottom stocks are the stocks which have
contributed least or in negative to the performance of the fund and may have been included in the portfolio during any period of time under analysis. Selection effect is the portion of portfolio
excess return attributable to choosing different securities within groups from the benchmark. Allocation effect is cash versus equity allocation. Total effect represents the opportunity cost of
investment decision in a group relative to overall benchmark. The average weights and attribution figures are estimates and should be used for indicative purposes only. Holdings may change
without notice. Benchmark- S&P BSE PSU TRI.
Disclaimer: The stocks referred above is for the purpose of information and / or illustration only and should not be construed as recommendations from Invesco Asset Management (India)
Private Limited/Invesco Mutual Fund. The Scheme may or may not have any present or future positions in these stocks. The performance of above stocks should not be construed as
performance of the Scheme as the Scheme would be constituted of number of stocks having different weights and the individual stock held by the scheme may or may not give positive returns.
Invesco Asset Management (India) Private Limited/Invesco Mutual Fund is not guaranteeing or promising or forecasting any returns
20Top 5 holdings/active holdings
% %
% Weight Weight Weight % Over-
Top 5 Holdings (Fund) Top 5 Active Holdings (Fund) (BM) weight
Power Grid Corp Of India Limited 8.19% Petronet LNG Limited 6.06% 0.00% 6.06%
Bharat Electronics Limited 7.27% Gujarat State Petronet Limited 5.34% 0.00% 5.34%
Bharat Petroleum Corp Limited 6.98% Indian Railway Finance 5.17% 0.00% 5.17%
Corporation
Petronet LNG Limited 6.06% SBI Cards & Payment Services 4.82% 0.00% 4.82%
Gujarat State Petronet Limited 5.34%
Bharat Electronics Limited 7.27% 2.55% 4.72%
Active positions across our stock holdings vis-à-vis the benchmark, subject to regulatory limits;
reflects our conviction on our ‘categorized’ stock universe
Past performance may or may not be sustained in future.
Portfolio data as on February 28, 2021. BM: Benchmark- S&P BSE PSU TRI.
Disclaimer: The stocks referred above should not be construed as recommendations from Invesco Asset Management (India) Private Limited and/or Invesco Mutual Fund. The Scheme may
or may not have any present or future positions in these stocks.
21Sector allocation (an outcome of stock selection)
Active Sector Weightings vis-à-vis benchmark (%)
Sector Exposure Fund (%) Benchmark (%)
Utilities 28.6% 23.3%
Financials 26.2% 35.4%
Materials 7.0%
Industrials 14.9% 10.0%
Utilities 5.3% Materials 12.3% 5.3%
Energy 11.9% 24.5%
Industrials 4.9%
Consumer Discretionary 2.8% 1.5%
Consumer Discretionary 1.4% Consumer Staples - -
Health Care - -
Financials -9.2% Information Technology - -
Communication Services - -
Energy -12.6%
Real Estate - -
-20% -10% 0% 10% 20% Cash & Cash Equivalent 3.2%
Data as on February 28, 2021. Source: Bloomberg, Internal.
Fund- Invesco India PSU Equity Fund. Benchmark- S&P BSE PSU TRI.
Sector Classification as per Global Industry Classification Standard (GICS). Active sector weightings indicate overweight/underweight position relative to the benchmark.
Disclaimer: The sectors referred above should not be construed as recommendations from Invesco Asset Management (India) Private Limited and/or Invesco Mutual Fund. The Scheme
may or may not have any present or future positions in these sectors.
22Performance
Lumpsum
Performance as on February 28,2021 Fund Managers: Nitin Gosar & Dhimant Kothari
Period Returns (%) CAGR Value of Rs. 10,000/- invested
Invesco India Benchmark Additional Invesco India Benchmark Additional
PSU Equity Benchmark PSU Equity Benchmark
Fund Fund
S&P BSE PSU TRI Nifty 50 TRI S&P BSE PSU Nifty 50 TRI
TRI
1 Year 12.70% 25.43% 31.37% 11,266 12,535 13,127
3 Years 4.96% -2.23% 12.88% 11,560 9,345 14,378
5 Years 13.32% 8.54% 17.29% 18,683 15,064 22,189
7 Years 14.61% 6.84% 14.14% 25,969 15,895 25,244
10 Years 7.88% 0.87% 11.91% 21,347 10,908 30,831
Since Inception
7.11% 0.15% 11.14% 21,710 10,172 32,912
(November 18, 2009)
Past performance may or may not be sustained in future.
The performance details provided herein are of existing plan (non - direct plan) – Growth Option. Benchmark returns are calculated using the Total Return variant of benchmark index (TRI).
Different plans have different expense structure. For calculating returns since inception, NAV as on the date of allotment is taken as Rs. 10/-. Face Value per unit is Rs. 10/-. Returns above
1 year are Compounded Annualised Growth Rate (CAGR). Fund Managers: Mr. Nitin Gosar managing since June 1, 2018 and Mr. Dhimant Kothari managing since May 19, 2020. For
performance of other schemes managed by the fund managers, please refer to the slide on ‘Performance of other schemes managed’. Please also refer slides on SIP performance of the
fund and SIP performance of other schemes managed by the fund managers. For performance of direct plans please refer to latest factsheet on our website or click on the link:
www.invescomutualfund.com/fund-performance.
23Performance
Systematic Investment Plan (SIP)
SIP Analysis as on February 28, 2021
(Rs. 10,000 invested on the first business day of every month) Fund Managers: Nitin Gosar & Dhimant Kothari
SIP Total Invesco India PSU Equity S&P BSE PSU TRI1 Nifty 50 TRI2
investment amount Fund
invested
(Rs.) Market value SIP returns Market value SIP returns (%) Market value SIP returns (%)
(Rs.) (%) XIRR (Rs.) XIRR (Rs.) XIRR
1 Year 120,000 147,146 45.42% 172,419 91.91% 158,761 66.33%
3 Years 360,000 445,933 14.49% 424,081 11.00% 478,297 19.47%
5 Years 600,000 759,594 9.40% 672,858 4.55% 887,303 15.70%
7 Years 840,000 1,174,100 9.43% 951,983 3.53% 1,363,994 13.64%
10 Years 1,200,000 1,996,778 9.85% 1,419,376 3.30% 2,412,890 13.41%
Since
1,360,000 2,318,870 9.05% 1,576,682 2.57% 2,904,130 12.73%
Inception
Past performance may or may not be sustained in future. The performance details provided herein are of existing plan (non - direct plan) – Growth Option. Benchmark returns are
calculated using the Total Return variant of respective benchmark index (TRI), wherever applicable. Different plans have different expense structure. Load is not taken into consideration.
For performance of other schemes managed by the fund manager, please refer to the slide on ‘Performance of other schemes managed’. Please also refer slides on SIP performance of
other schemes managed by the fund managers. 1 Scheme Benchmark. 2 Additional Benchmark. Inception date: 18 November, 2009.
Note: XIRR method is used to calculate SIP returns. The above investment simulation is for illustrative purpose only and should not be construed as a promise on minimum returns and
safeguard of capital. Invesco Asset Management (India) Private Limited/Invesco Mutual Fund is not guaranteeing or promising or forecasting any returns. SIP does not ensure a profit or
guarantee protection against a loss in a declining market. Please refer SIP Enrolment Form or contact nearest ISC for Load Structure.
24Calendar year returns
S&P BSE PSU TRI
Period Fund Returns Nifty 50 TRI Returns
Returns
CY 2010 11.45% 1.06% 19.22%
CY 2011 -24.46% -31.64% -23.81%
CY 2012 17.75% 15.94% 29.25%
CY 2013 -15.05% -18.32% 8.07%
CY 2014 54.55% 42.61% 32.9%
CY 2015 2.53% -14.87% -3.01%
CY 2016 17.94% 16.89% 4.39%
CY 2017 24.26% 22.69% 30.27%
CY 2018 -16.9% -18.69% 4.64%
CY 2019 10.08% -1.12% 13.48%
CY2020 6.05% -12.76% 16.09%
Past performance may or may not be sustained in future.
Returns are absolute. The performance details provided herein are of existing plan (non - direct plan) – Growth Option. Benchmark returns are calculated
using the Total Return variant of respective benchmark index (TRI), wherever applicable. Different plans have different expense structure. Please refer slide
on ‘Lumpsum Performance’ for performance of the Scheme. Invesco Asset Management (India) Private Limited is not guaranteeing or promising or
forecasting any returns. For performance of direct plans please refer to latest factsheet on our website or click on the link:
www.invescomutualfund.com/fund-performance. CY: Calendar Year.
25Portfolio Characteristics
Characteristic Invesco India PSU Equity S&P BSE PSU TRI^
Fund
Price to Earnings1-FY22E
12.3 8.5
Last 3Y EPS Growth2 – (FY17-20)
26.1% 85.9%
12 Month Trailing Price to Cash flow1
9.2 5.0
12 Month Trailing Price to Book Value1
1.9 1.1
ROE-FY21 E1
14.1% 9.0%
Source: Factset / Internal. Data as on February 28, 2021
1 Weighted Harmonic Mean.
2 Weighted Arithmetic Mean.
“Weighted Arithmetic Mean” is an average resulting from the multiplication of observation for each company by the weightage of that stock in the portfolio / index.
“Weighted Harmonic Mean” is an average resulting from the multiplication of the reciprocal of the observation for each component by the weightage of that stock in the portfolio/index.
It reduces the impact of outliers. ROE: Return on Equity. EPS: Earnings Per Share. ^Benchmark
26Key facts
Type of the Scheme An open ended equity scheme following PSU theme
Investment Objective To generate capital appreciation by investing in Equity and Equity Related Instruments of companies where the Central / State Government(s) has
majority shareholding or management control or has powers to appoint majority of directors.
Asset Allocation Type of security Normal Allocation (% of total assets) Risk Profile
Equity and Equity Related Instruments of Public
80–100% High
Sector Undertakings (PSUs)
Equity and Equity Related Instruments other than
0–20% High
Public Sector Undertakings (PSUs)
Debt and Money Market Instruments 0-20% Low to medium
Debt instruments may include securitized debt upto 20% of the net assets of the Scheme. The Scheme will not invest in foreign securitized debt. The
Scheme may use derivatives for purposes as may be permitted from time to time. The maximum derivative position will be restricted to 50% of the net
assets of the Scheme. The cumulative gross exposure through equity, debt and derivative positions shall not exceed 100% of the net assets of the
Scheme, subject to provisions of SEBI circular dated August 18, 2010 w.r.t. investment in derivatives.
Minimum Application Lumpsum: Rs. 1,000/- per application and in multiples of Re. 1 thereafter. For Systematic Investment Plan (SIP):
Amount
Options Minimum Amount Minimum Installments
Rs. 500 per month and in multiples of Re. 1 thereafter 12
Monthly
Rs. 1,000 per month and in multiples of Re. 1 thereafter 6
Quarterly Rs. 1,500 per quarter and in multiples of Re. 1 thereafter 4
Plans^/Options Growth Option
(Applicable to Direct Dividend Payout
Plan also) Dividend Reinvestment (If dividend payable under dividend option is equal to or less than Rs. 100/- then the dividend would be compulsorily reinvested)
Loads Entry Load: Nil*
Exit Load: #
if upto 10% of Units allotted are redeemed / switched-out within 1 year from the date of allotment– Nil
for any redemption / switch-out in excess of 10% of units allotted within 1 year from the date of allotment– 1%
if units are redeemed or switched out after 1 year from the date of allotment.- Nil
Switch between the Plans under the Scheme: Nil
Fund Managers Nitin Gosar & Dhimant Kothari
Benchmark S&P BSE PSU TRI
^ Direct Plan will have a lower expense ratio excluding distribution expenses, commission for distribution of Units etc.
*The upfront commission, if any, on investment made by the investor shall be paid by the investor directly to the Distributor, based on his assessment of various factors including the service
rendered by the Distributor.
#Exit load charged, if any, will be credited back to the scheme, net of Goods and Services Tax.
Benchmark based on Total Return variant of respective benchmark index. (TRI),wherever applicable.
27Performance of other schemes managed
Performance as on February 28, 2021
Returns (% CAGR)
Period 1 Year 3 Years 5 Years 7 Years 10 Years
Fund Benchmark Fund Benchmark Fund Benchmark Fund Benchmark Fund Benchmark
Fund Managers: Taher Badshah & Dhimant Kothari
Invesco India Contra 30.91% 34.42% 10.87% 11.12% 19.02% 17.54% 19.60% 15.55% 15.40% 12.49%
Fund
Fund Managers: Amit Nigam & Dhimant Kothari
Invesco India Tax Plan 25.38% 33.70% 11.45% 12.06% 17.28% 17.63% 17.65% 15.44% 15.18% 12.57%
Fund Managers: Amit Nigam, Dhimant Kothari (Equity investments) & Krishna Cheemalapati (Debt investments)
Invesco India Equity 8.83% 15.44% - - - - - - - -
Savings Fund
Fund Managers: Dhimant Kothari & Hiten Jain
Invesco India Financial 15.25% 18.92% 10.43% 16.07% 20.01% 23.32% 19.10% 20.60% 13.76% 15.62%
Services Fund
Fund Managers: Amit Nigam & Nitin Gosar
Invesco India Largecap 21.42% 31.37% 9.33% 12.88% 14.23% 17.29% 14.13% 14.14% 11.72% 11.91%
Fund
Past performance may or may not be sustained in future.
The performance details provided herein are of existing plan (non – direct plan) – Growth Option. Different plans have different expense structure. Face Value per unit
is Rs. 10/-. Returns above 1 year are Compounded Annualised Growth Rate (CAGR). Benchmark Returns are calculated using Total Return variant of respective
Benchmark Index (TRI), wherever applicable. No. of schemes managed - Mr. Dhimant Kothari: 5, Nitin Gosar: 2.
Funds benchmark- Invesco India Contra Fund: S&P BSE 500 TRI; Invesco India Tax Plan: S&P BSE 200 TRI; Invesco India Equity Savings Fund: Nifty Equity Savings
Index; Invesco India Financial Services Fund: Nifty Financial Services TRI; Invesco India Largecap Fund: Nifty 50 TRI. For performance of direct plans please refer to
latest factsheet on our website or click on the link: www.invescomutualfund.com/fund-performance. Fund Managers managing the schemes since: Invesco India Contra
Fund – Taher Badshah - January 13, 2017 and Dhimant Kothari – May 19, 2020; Invesco India Tax Plan: Amit Nigam- September 3, 2020 and Dhimant Kothari –March
29, 2018; Invesco India Equity Savings Fund- Amit Nigam- September 3, 2020, Dhimant Kothari- May 19, 2020 and Krishna Cheemalapati- March 7, 2019; Invesco
India Financial Services Fund- Dhimant Kothari- June 1, 2018 and Hiten Jain- May 19, 2020; Invesco India Largecap Fund- Amit Nigam- September 3, 2020 and Nitin
Gosar- March 29, 2018.
28SIP performance of other schemes managed (CONTINUED)
SIP Analysis as on February 28, 2021
(Rs. 10,000 invested on the first business day of every month) Fund Managers: Taher Badshah & Dhimant Kothari
SIP investment Total amount Invesco India Contra Fund S&P BSE 500 TRI1 Nifty 50 TRI2
invested (Rs.)
Market value SIP returns (%) Market value (Rs.) SIP returns (%) Market value SIP returns (%)
(Rs.) XIRR XIRR (Rs.) XIRR
1 Year 120,000 159,487 67.66% 162,356 72.96% 158,761 66.33%
3 Years 360,000 482,915 20.16% 483,784 20.29% 478,297 19.47%
5 Years 600,000 900,198 16.29% 883,554 15.53% 887,303 15.70%
7 years 840,000 1,455,977 15.47% 1,376,712 13.90% 1,363,994 13.64%
10 years 1,200,000 2,913,084 16.92% 2,494,277 14.03% 2,412,890 13.41%
Since Inception 1,670,000 5,547,477 15.88% 4,354,648 12.82% 4,176,759 12.29%
Fund Manager: Amit Nigam & Nitin Gosar
SIP investment Total amount Invesco India Largecap Fund Nifty 50 TRI1 S&P BSE Sensex TRI2
invested (Rs.)
Market value SIP returns (%) Market value (Rs.) SIP returns (%) Market value SIP returns (%)
(Rs.) XIRR XIRR (Rs.) XIRR
1 Year 120,000 150,705 51.74% 158,761 66.33% 157,647 64.29%
3 Years 360,000 453,312 15.65% 478,297 19.47% 481,833 20.00%
5 Years 600,000 818,104 12.40% 887,303 15.70% 907,359 16.62%
7 years 840,000 1,266,602 11.56% 1,363,994 13.64% 1,393,707 14.24%
10 years 1,200,000 2,304,010 12.54% 2,412,890 13.41% 2,472,879 13.87%
Since Inception 1,390,000 2,886,942 12.00% 3,013,275 12.68% 3,091,469 13.08%
Past performance may or may not be sustained in future. The performance details provided herein are of existing plan (non - direct plan) – Growth Option. Benchmark returns are
calculated using the Total Return variant of respective benchmark index (TRI). Different plans have different expense structure. Load is not taken into consideration. For performance of
other schemes managed by the fund managers, please refer to the slide on ‘Performance of other schemes managed’. 1Scheme Benchmark. 2 Additional Benchmark.
Inception date: Invesco India Contra Fund – 11 April, 2007. Invesco India Largecap Fund –21, August 2009.
Note: XIRR method is used to calculate SIP returns. The above investment simulation is for illustrative purpose only and should not be construed as a promise on minimum returns and
safeguard of capital. Invesco Asset Management (India) Private Limited/Invesco Mutual Fund is not guaranteeing or promising or forecasting any returns. SIP does not ensure a profit or
guarantee protection against a loss in a declining market. Please refer SIP Enrolment Form or contact nearest ISC for Load Structure.
29SIP performance of other schemes managed
SIP Analysis as on February 28, 2021
(Rs. 10,000 invested on the first business day of every month) Fund Manager: Amit Nigam & Dhimant Kothari
SIP investment Total amount Invesco India Tax Plan S&P BSE 200 TRI1 Nifty 50 TRI2
invested (Rs.)
Market value SIP returns (%) Market value (Rs.) SIP returns (%) Market value SIP returns (%)
(Rs.) XIRR XIRR (Rs.) XIRR
1 Year 120,000 156,392 62.00% 160,981 70.42% 158,761 66.33%
3 Years 360,000 476,733 19.23% 483,199 20.20% 478,297 19.47%
5 Years 600,000 877,094 15.23% 888,556 15.76% 887,303 15.70%
7 years 840,000 1,391,441 14.20% 1,383,633 14.04% 1,363,994 13.64%
10 years 1,200,000 2,728,804 15.71% 2,504,038 14.10% 2,412,890 13.41%
Since Inception 1,700,000 5,546,952 15.36% 4,526,130 12.84% 4,308,364 12.22%
Fund Managers: Dhimant Kothari & Hiten Jain
SIP investment Total amount Invesco India Financial Services Nifty Financial Services TRI1 Nifty 50 TRI2
invested (Rs.) Fund
Market value SIP returns (%) Market value (Rs.) SIP returns (%) Market value SIP returns (%)
(Rs.) XIRR XIRR (Rs.) XIRR
1 Year 120,000 161,624 71.61% 167,215 82.04% 158,761 66.33%
3 Years 360,000 464,742 17.41% 492,668 21.60% 478,297 19.47%
5 Years 600,000 868,342 14.82% 964,306 19.11% 887,303 15.70%
7 Years 840,000 1,413,000 14.63% 1,566,209 17.52% 1,363,994 13.64%
10 years 1,200,000 2,671,010 15.31% 2,992,239 17.42% 2,412,890 13.41%
Since Inception 1,520,000 4,396,777 15.63% 4,977,986 17.38% 3,646,294 12.98%
Past performance may or may not be sustained in future. The performance details provided herein are of existing plan (non - direct plan) – Growth Option. Benchmark returns are
calculated using the Total Return variant of respective benchmark index (TRI). Different plans have different expense structure. Load is not taken into consideration. For performance of
other schemes managed by the fund managers, please refer to the slide on ‘Performance of other schemes managed’. 1Scheme Benchmark. 2 Additional Benchmark.
Inception date: Invesco India Tax Plan –December 29, 2006; Invesco India Financial Services Fund- July 14, 2008. Note: XIRR method is used to calculate SIP returns. The above
investment simulation is for illustrative purpose only and should not be construed as a promise on minimum returns and safeguard of capital. Invesco Asset Management (India) Private
Limited/Invesco Mutual Fund is not guaranteeing or promising or forecasting any returns. SIP does not ensure a profit or guarantee protection against a loss in a declining market. Please
refer SIP Enrolment Form or contact nearest ISC for Load Structure.
30SIP Performance of other schemes managed (CONTINUED)
SIP Analysis as on February 28, 2021
(Rs. 10,000 invested on the first business day of every month) Fund Managers: Amit Nigam, Dhimant Kothari (For equity) and
Krishna Cheemalapati (For debt)
Invesco India Equity Savings
Fund Nifty Equity Savings Index1 CRISIL 10 Yr Gilt Index2
Total amount Market SIP returns (%) Market SIP returns (%) Market SIP returns (%)
SIP investment invested (Rs.) value (Rs.) XIRR value (Rs.) XIRR value (Rs.) XIRR
1 Year 120,000 130,231 16.51% 134,537 23.69% 120,756 1.19%
Since Inception 240,000 265,551 10.16% 275,313 13.95% 254,075 5.64%
Past performance may or may not be sustained in future. The performance details provided herein are of existing plan (non - direct plan) – Growth Option. Different plans have
different expense structure. Load is not taken into consideration. Benchmark Returns are calculated using Total Return variant of respective Benchmark Index (TRI). For performance of
other schemes managed by the fund managers, please refer to the slide on ‘Performance of other schemes managed’. 1Scheme Benchmark. 2Additional Benchmark. Inception date:
Invesco India Equity Savings Fund– 7 March 2019.
Note: XIRR method is used to calculate SIP returns. The above investment simulation is for illustrative purpose only and should not be construed as a promise on minimum returns and
safeguard of capital. Invesco Asset Management (India) Private Limited/Invesco Mutual Fund is not guaranteeing or promising or forecasting any returns. SIP does not ensure a profit or
guarantee protection against a loss in a declining market. Please refer SIP Enrolment Form or contact nearest ISC for Load Structure.
31Annexure Divestment examples
Privatization of PSU companies leading to wealth creation
Company Date of divestment Funds investment strategy provides
the flexibility to hold companies
Hindustan Zinc 29 August 2000 which subsequently may get
privatized or where the Government
Maruti Suzuki 8 July 2003 shareholding gets reduced through
the process of disinvestment
Company Details as on the date of Market Price as on CAGR Returns (%)
divestment 26 Feb 2021
Stock Price Sensex Stock Sensex Stock S&P BSE
Sensex
Hindustan 8 4402 297.5 49099.99 19.28% 12.48%
Zinc
Maruti Suzuki 125 3630 6866 49099.99 25.48% 15.90%
Past performance may or may not be sustained in future. Data source: Bloomberg/Capitaline/Internal. The above are some of the companies which have gained and it is not
necessary that all PSU companies have benefited. The stock referred above should not be construed as recommendation, advice to buy, sell or in any manner transact in this stock and
neither should it be considered as Research Report from IAMI. The above table is for illustration purpose only and should not be construed as a promise on minimum returns and
safeguard of capital. The performance of above stocks should not be construed as performance of the Scheme as the Scheme would be constituted of number of stocks having different
weights and the individual stock held by the scheme may or may not give positive returns. Invesco Asset Management (India) Pvt. Ltd. is not guaranteeing or forecasting any returns.
Please refer slide on ‘Lumpsum Performance’ for performance of the Scheme.
Disclaimer: The stocks referred above is/are for information and / or illustration purpose only and should not be construed as recommendation from Invesco Asset Management (India)
Private Limited/Invesco Mutual Fund. The Scheme may or may not have any present or future positions in these stocks.
33Divestment Examples since January 2018 – Post IPO
Performance
S&P BSE
Stock
Sensex
Stock Price Returns
Returns(from
Company Listing Date Issue Price as at Feb 26, (from issue
listing date
2021 price till Feb
till Feb 26,
26, 2021)
2021)
Indian Railway Catering and Tourism 14-Oct-19 320 1759.69 246% 20%
Corporation Limited
MSTC Limited 29-Mar-19 120 274.35 54% 13%
Mazagon Dock Shipbuilders 12-Oct-20 145 213.2 47% 66%
SBI Cards and Payment Services Ltd 16-Mar-20 755 1069.3 42% 60%
Rail Vikas Nigam Limited 11-Apr-19 19 31.75 31% 14%
Mishra Dhatu Nigam Limited 04-Apr-18 90 191.2 30% 15%
Garden Reach Shipbuilders & Engineers Limited 10-Oct-18 118 198.05 24% 16%
Railtel 26-Feb-21 109 121.35 11% -
RITES Limited 02-Jul-18 185 244.9 11% 39%
UTI Asset Management Co. Limited 12-Oct-20 554 589.95 6% 66%
Ircon International Limited 28-Sep-18 83.06 94.25 5% 36%
IRFC 29-Jan-21 24.90 24.65 -1% 6%
Hindustan Aeronautics Limited 28-Mar-18 1215 1087.05 -4% 49%
Bharat Dynamics Limited 23-Mar-18 428 350.3 -7% 51%
Past performance may or may not be sustained in future. Data source: Bloomberg/NSE. Returns less than 1 year are absolute; above 1 year are CAGR. Compounded Annualised
Growth Rate (CAGR). The stock referred above should not be construed as recommendation, advice to buy, sell or in any manner transact in this stock and neither should it be considered
as Research Report from IAMI. The above table is for illustration purpose only and should not be construed as a promise on minimum returns and safeguard of capital. The performance of
above stocks should not be construed as performance of the Scheme as the Scheme would be constituted of number of stocks having different weights and the individual stock held by
the scheme may or may not give positive returns. Invesco Asset Management (India) Pvt. Ltd. is not guaranteeing or forecasting any returns. Please refer slide on ‘Lumpsum Performance’
for performance of the Scheme.
Disclaimer: The stocks referred above is/are for information and / or illustration purpose only and should not be construed as recommendation from Invesco Asset Management (India)
Private Limited/Invesco Mutual Fund. The Scheme may or may not have any present or future positions in these stocks.
34Disclaimer Disclaimer: The information alone is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. All figures, charts/graphs and data included in this presentation are as on date and are subject to change without notice. The statements contained herein are based on our current views and involve known/unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. The data used in this presentation is obtained by Invesco Asset Management (India) Private Limited from the sources which it considers reliable. The stocks/sectors referred in the presentation should not be construed as recommendations from Invesco Asset Management (India) Private Limited and/or Invesco Mutual Fund and the Scheme may or may not have any present or future positions in these stocks/sectors. While utmost care has been exercised while preparing this presentation, Invesco Asset Management (India) Private Limited does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. The content of this presentation is intended solely for the use of the addressee. If you are not the addressee or the person responsible for delivering it to the addressee, any disclosure, copying, distribution or any action taken or omitted to be taken in reliance on it is prohibited and may be unlawful. The recipient(s) before acting on any information herein should make his/their own investigation and seek appropriate professional advice. Disclosure of Risk-o-Meter - Risk-o-meter disclosed in the product label of the Scheme is based on the Scheme portfolio as on February 28, 2021. The AMC will evaluate the Risk-o-Meter on a monthly basis and shall disclose the same along with the portfolio disclosure. Any change in the risk-o-meter will be communicated by way of Notice-cum-Addendum and by way of an Email /SMS to the Unit holders of the Scheme. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. 35
Get in touch Corporate Office: Invesco Asset Management (India) Private Limited 2101 A, 21st Floor, A- Wing, Marathon Futurex, N.M. Joshi Marg, Lower Parel, Mumbai – 400 013 +91 22 67310000 F +91 22 23019422 To invest: Call 1800-209-0007 ∆ sms ‘Invest’ to 56677 Invest Online www.invescomutualfund.com 36
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