Official Gazette Notification Text
Official TranscriptScheme Information Document Nippon India Nifty India Defence Index Fund An open-ended scheme replicating/ tracking Nifty India Defence Index Name of Mutual Fund: Nippon India Mutual Fund (NIMF) Name of Asset Management Company: Nippon Life India Asset Management Limited (NAM India) CIN : L65910MH1995PLC220793 Address of AMC: 30th Floor, One Lodha Place, Senapati Bapat Marg, Lower Parel, Mumbai –...
Scheme Information Document Nippon India Nifty India Defence Index Fund An open-ended scheme replicating/ tracking Nifty India Defence Index
Name of Mutual Fund: Nippon India Mutual Fund (NIMF)
Name of Asset Management Company: Nippon Life India Asset Management Limited (NAM India)
CIN : L65910MH1995PLC220793
Address of AMC: 30th Floor, One Lodha Place, Senapati Bapat Marg, Lower Parel, Mumbai – 400013.
Tel No. +91 022 6808 7000 Fax No. +91 022 6808 7097
Website of AMC: https://mf.nipponindiaim.com
Name of Trustee Company: Nippon Life India Trustee Limited (NLITL)
CIN : U65910MH1995PLC220528
Address of Trustee Company: 30th Floor, One Lodha Place, Senapati Bapat Marg, Lower Parel, Mumbai – 400013.
Tel No. +91 022 6808 7000 Fax No. +91 022 6808 7097
Name of the Scheme: Nippon India Nifty India Defence Index Fund
Category of Scheme: Index Fund
Scheme Code:
NFO open date:
NFO close date:
Scheme re-opens for continuous sale &
repurchase not later than: (Any modification to the New Fund Offer Period shall be announced by way of an Addendum uploaded on website of the AMC.
Offer of Units of Rs. 10/- each during the New Fund Offer and Continuous offer for Units at NAV based prices
Investment Objective Scheme Riskometer: Benchmark Riskometer:
Nippon India Nifty India Defence Index Fund Nifty India Defence TRI Nippon India Nifty India Defence Index Fund To provide investment returns that commensurate to the total returns of the securities as represented by the Nifty India Defence Index before expenses, subject to tracking errors.
There is no assurance that the investment objective of the Scheme will be achieved.
Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
The product labelling assigned during the NFO is based on internal assessment of the scheme characteristics or model portfolio and the same may vary post NFO when the actual investments are made.
Investors are advised to refer to the Statement of Additional Information (SAI) for details of the Nippon India Mutual Fund Standard Risk Factors, Special Considerations, Tax and Legal issues and other general information on https://mf.nipponindiaim.com The particulars of the Scheme have been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations 2026, (herein after referred to as SEBI MF Regulations) as amended till date and circulars issued thereunder filed with SEBI. The units being offered for public subscription have not been approved or recommended by SEBI nor has SEBI certified the accuracy or adequacy of the Scheme Information Document.
The Scheme Information Document sets forth concisely the information about the scheme that a prospective investor ought to know before investing. Before investing, investors should also ascertain about any further changes to this Scheme Information Document after the date of this Document from the Mutual Fund / Investor Service Centres / Website / Distributors or Brokers.
SAI is incorporated by reference (is legally a part of the Scheme Information Document). For a free copy of the current SAI, please contact your nearest Investor Service Centre or log on to our website.
The Scheme Information Document should be read conjunction with the SAI and not in isolation.
The Scheme Information Document of Nippon India Nifty India Defence Index Fu nd had been approved by the Board of Nippon Life India Trustee Limited on June 25, 2026. Scheme Information Document is dated October 16, 2026.
1DISCLAIMERS
Disclaimer by the Index Provider:
Performance of the underlying index will have a direct bearing on the performance of the Scheme. In the event the index is dissolved or is withdrawn by the index provider, the Trustee reserves a right to modify the Scheme so as to track a different and suitable index and the procedure stipulated in the SEBI Regulations shall be complied with.
1. Disclaimer of NSE Indices Limited: a. “The Product(s) are not sponsored, endorsed, sold or promoted by NSE INDICES LIMITED (formerly known as India Index Services & Products Limited (“IISL”)). NSE Indices Limited does not make any representation or warranty, express or implied to the Unit holders of any product or any member of the public regarding the advisability of investing in Securities generally or in any product particularly or the ability of the underlying index to track general stock market performance in India. The relationship of NSE Indices Limited to Nippon Life India Asset Management Limited (NAM India) is only in respect of the licensing of certain trademarks and trade-names of the underlying index which is determined, composed and calculated by NSE Indices Limited without regard to the NAM India or any product. NSE Indices Limited has no obligation to take the needs of the NAM India or the Unit holders of the products into consideration in determining, composing or calculating the underlying index. NSE Indices Limited is not responsible for and has not participated in the determination of the timing of, prices at, or quantities of the products to be issued or in the determination or calculation of the equation by which the products are to be converted into cash. NSE Indices Limited has no obligation or liability in connection with the administration or marketing or trading of the products.” b. “NSE Indices Limited does not guarantee the accuracy and/or the completeness of the underlying index or any data included therein and they shall have no liability for any errors, omissions, or interruptions therein. NSE Indices Limited makes no warranty, express or implied, as to the results to be obtained by the NAM India, Unit holders of the products or any other persons or entities from the use of the underlying index or any data included therein. NSE Indices Limited makes no express or implied warranties and expressly disclaim all warranties of merchantability or fitness for a particular purpose or use with respect to the underlying index or any data included therein. Without limiting any of the foregoing, in no event shall NSE Indices Limited have any liability for any special, punitive, indirect or consequential damages (including lost profits), even if notified of the possibility of such damages.
An investor, by subscribing or purchasing an interest in the Product(s), will be regarded as having acknowledged, understood and accepted the disclaimer referred to in Clauses above and will be bound by it.
2Part I. HIGHLIGHTS/SUMMARY OF THE SCHEME Sr. No. Title Description I. Benchmark (TRI) Nifty India Defence TRI The scheme is an index fund, investing in Nifty India Defence TRI. The composition of the benchmark is such that it is most suited for comparing performance of the scheme.
Total Return variant of the index (TRI) will be used for performance comparison.
About Nifty India Defence TRI - Nifty India Defence Index aims to track the performance of portfolio of stocks that broadly represent the Defence theme. From the Nifty Total Market index, stocks forming part of eligible basic industries or those which obtain at least 10% of revenues from the defence industry are eligible to be included in the index and are chosen based on 6 month average free-float market capitalisation. The weight of the stocks in the index is based on their free-float market capitalization. Stock weights are capped at 20% each.
II. Plans and Options Plan(s): Direct Plan and Regular Plan:
Plans/Options and sub Options under each Plan(s) is Growth Option options under the Scheme Direct Plan is only for investors who purchase /subscribe Units in a Scheme directly with the Fund (i.e. investments not routed through an AMFI Registration Number (ARN) Holder).
The AMC, in consultation with the Trustees reserves the right to discontinue/ add more plans/ options at a later date subject to complying with the prevailing SEBI guidelines and Regulations.
Default Plan Scena Broker Code mentioned Plan mentioned by Default Plan to be rio by the investor the investor captured 1 Not mentioned Not mentioned Direct Plan 2 Not mentioned Direct Plan Direct Plan 3 Not mentioned Regular Plan Direct Plan 4 Mentioned Direct Plan Direct Plan 5 Direct Not mentioned Direct Plan 6 Direct Regular Plan Direct Plan 7 Mentioned Regular Plan Regular Plan 8 Mentioned Not mentioned Regular Plan For detailed disclosure on default plans and options, kindly refer SAI Treatment of Transactions received with invalid ARNs (As per AMFI Best practices guidelines circular no.111/2023-24 dated February 02,2024) A. Definition of ‘Invalid ARN’: “Invalid ARNs” shall include ARN validity period expired or terminated or cancelled or suspended or suspended due to Nomenclature changes or ARN not empanelled with AMC or ARN holder decease and last ARN holder debarred by SEBI B. Guidelines for Processing of transactions received under Regular Plan with invalid ARN:
Transactions received in Regular Plan with Invalid ARN to be processed in Direct Plan of the same Scheme (even if reported in Regular Plan), as below:
Notes:
1. *If the EUIN is invalid/missing, the transactions shall be processed in Regular plan, and the distributor/investor shall be given 30day period from the date of the transaction for remediation of the EUIN. The commission shall not be paid till the EUIN is remediated.
32. For SIP & STP facilities, the ARN validity shall be verified / validated at the time of registration. For instances where the registration details not available in RTA records the transaction shall be treated as lumpsum purchase for validations.
3. SIPs registered under ARN of deceased to continue till end of SIP registration period or investor’s request as per AMFI guidelines; No fresh transactions or SIPs will be booked under the ARN of deceased MFD post cancellation of ARN at AMFI.
4. Only Sub-distributor’s ARN with valid “ARN-“values in the transaction will be considered for validation of Sub- distributor ARN for all types of transactions (lumpsum/SIP/STP).
5. If the ARN is invalid as on date of SIP / STP registration, such registration and future transactions thereunder will be processed under DIRECT plan.
6. Transactions other than through physical mode which are found to be not in order basis above matrix, will be rejected instead of processing in Direct Plan.
7. Transactions received from the stock exchange platforms in Demat mode with invalid ARN shall be rejected instead of processing in Direct Plan.
8. IDCW reinvestment transactions, being a corporate action, will be excluded from the above validation III. Load Structure Entry Load: Not Applicable In accordance with para 11.7.1. of SEBI Master Circular on Mutual Funds as amended from time to time, there shall be no entry load.
Exit Load: Nil Unitholders will have the flexibility to change the allocation of their investments among the various scheme(s) offered by the Mutual Fund, in order to suit their changing investment needs, by easily switching between the scheme(s) / plans/options of the Mutual Fund.
Switchover Facility: Available, subject to minimum application amount in switch in scheme (for opening a new folio/account) and minimum additional investment amount in in switch in scheme for switch-ins thereafter.
Inter Scheme Switch: At the applicable loads in the respective schemes.
Inter Plan/Inter Option Switch/STP:
Switch / Systematic transfer of Investments made from ‘Regular Plan’ to ‘Direct Plan’ under the scheme and vice versa, will not be subject to exit load No load shall be applicable for Inter Option Switch/systematic transfer of investments within the same plan under the scheme (for e.g. Growth option to Income Distribution cum Capital Withdrawal option and vice versa).
Further, the Trustees shall have a right to prescribe or modify the load structure with prospective effect subject to a maximum prescribed under the Regulations. For any change in load structure NAM India will issue an addendum and display it on the website/Investor Service Centres.
The investor is requested to check the prevailing load structure of the scheme before investing.
Load amounts are variable and are subject to change from time to time. NAM India, in consultation with the Trustees, reserves the right to change the load structure if it so deems fit in the interest of smooth and efficient functioning of the scheme. Any imposition or enhancement in the load shall be applicable on prospective investments only. At the
time of changing the load structure:
(i) The addendum detailing the changes may be attached to Scheme Information Documents and key information memorandum. The addendum may be circulated to all the distributors/brokers so that the same can be attached to all Scheme Information Documents and key information memoranda already in stock.
(ii) Arrangements may be made to display the addendum in the Scheme Information Document in the form of a notice in all the investor service centres and distributors/brokers office.
(iii) The introduction of the exit load alongwith the details may be stamped in the acknowledgement slip issued to the investors on submission of the application form and may also be disclosed in the statement of accounts issued after the introduction of such load.
(iv) Any other measures which the mutual funds may feel necessary.
Load is an amount which is paid by the investor to redeem the units from the scheme. For the current applicable structure, please refer to the website of the AMC https://mf.nipponindiaim.com or may call at Customer Service Centre 1860-266-0111 (charges applicable), and Investors outside India can call at 91-22-69259696 (charges applicable) or your distributor.
IV. Minimum Application During NFO & On continuous basis:
Amount/switch in Rs.1,000 and in multiples of Re.1 thereafter Note – For investments made by designated employees in terms of Clause 7.14 of SEBI Master circular dated March 20, 2026, requirement for minimum application/ redemption amount will not be applicable.
4V. Minimum Additional Minimum Additional Investment:
Purchase Amount Rs.1,000 and in multiples of Re.1 thereafter Note – For investments made by designated employees in terms of Clause 7.14 of SEBI Master circular dated March 20, 2026, requirement for minimum application/ redemption amount will not be applicable.
VI. Minimum Minimum Redemption Amount Redemption/switch out Redemptions can be of minimum amount of Rs.100 or any number of units or account balance, whichever is lower. amount Note – For investments made by designated employees in terms of Clause 7.14 of SEBI Master circular dated March 20, 2026, requirement for minimum application/ redemption amount will not be applicable.
Minimum Switch Amount Will be as per the minimum application amount in the respective scheme which may have been opted by the Investor for switching the units/amount where the switch facility is available.
NIMF/NAM India reserves the right to introduce, change, modify or withdraw any of the features available in this facility from time to time.
VII. Tracking Error Tracking error is defined as the annualized standard deviation of the difference in the daily returns between the NAV of the Scheme and the Underlying Index based on past one year rolling data.
For ETFs/ Index Funds in existence for a period of less than one year, the annualized standard deviation shall be calculated based on available data.
The AMC would monitor the tracking error of the Scheme on an ongoing basis and would seek to minimize tracking error. Under normal market circumstances, tracking error based on past one year rolling data shall not exceed 2%.
However, in case of unavoidable circumstances in the nature of force majeure, which are beyond the control of the AMCs, the tracking error may exceed 2% and the same shall be brought to the notice of Trustees with corrective actions taken by the AMC, if any.
The AMC shall disclose tracking error, on a daily basis, on the website of AMC and AMFI.
The disclosure of tracking error is provided on the AMC website on
https://mf.nipponindiaim.com/TotalExpenseRatio/Tracking-Error-and-Tracking-Difference-of-ETFs-and-Index- Funds.xlsx Regular Plan Direct Plan Not Applicable as this is a new scheme.
VIII. Tracking Difference Tracking Difference is defined as the annualized difference of returns between the NAV of the Scheme and the underlying index.
On completion of 1 year, the tracking difference scheme shall be disclosed on the website of the AMC and AMFI on a monthly basis, for tenures 1 year, 3 year, 5 year, 10 year and since the date of allotment of units.
The disclosure of tracking difference is provided on the AMC website on
https://mf.nipponindiaim.com/TotalExpenseRatio/Tracking-Error-and-Tracking-Difference-of-ETFs-and-Index- Funds.xlsx Regular Plan Direct Plan Not Applicable as this is a new scheme.
IX. Computation of NAV The AMC will calculate and disclose the first NAV within 5 working days from the date of allotment. Subsequently, the NAV will be calculated on every Business Day and uploaded on the AMFI website www.amfiindia.com and Nippon India Mutual Fund website i.e. https://mf.nipponindiaim.com by 11.00 p.m. on the on the same business day. Further, AMC will extend facility of sending latest available NAVs to unitholders through SMS, upon receiving a specific request in this regard.
In case NAV of Corporate Debt Market Development Fund (‘CDMDF’) units is not available by 9:30 p.m. of same Business Day, NAV declaration timing for Mutual Fund Schemes holding units of CDMDF shall be 10 a.m. on next business day instead of 11 p.m. on same Business Day.
The Net Asset Value (NAV) of the Units will be determined daily or as prescribed by the Regulations. The NAV shall be calculated in accordance with the following formula, or such other formula as may be prescribed by SEBI from time to time.
Market/Fair Value of Scheme’s Investments + Receivables + Accrued Income + Other Assets - Accrued Expenses- Payables- Other Liabilities NAV = Number of Units Outstanding
Example: If the applicable NAV is Rs. 10.00, sales/entry load is 2 per cent and the exit/repurchase load is 2 percent then the sales price will be Rs. 10.20 and the repurchase price will be Rs. 9.80.
5Rounding off policy for NAV Net Asset Value of the Units in the Scheme is calculated in the manner provided in this Scheme Information Document or as may be prescribed by Regulations from time to time. The NAV will be computed upto four decimal places.
Detailed disclosure on computation of NAV is provided on
https://mf.nipponindiaim.com/investor-service/downloads/scheme-information-document X. Asset Allocation Under normal circumstances, the anticipated asset allocation would be:
Indicative asset allocation (% of total assets) Instruments Minimum Maximum Securities constituting Nifty India Defence Index 95 100 Cash & cash equivalents* and Money Market instruments and/or Schemes which 0 5 invest in the money market securities or Liquid Schemes# *Cash Equivalents include Government Securities, T-Bills and Repo on Government Securities having residual maturity of less than 91 days.
#The Scheme may invest upto 5% net assets in money market / liquid schemes of Nippon India Mutual Fund and/ or any other mutual fund without charging any fees, provided that aggregate inter-scheme investment made by all schemes under the same management company or in schemes under the management of any other AMC shall not exceed 5% of the NAV of the Mutual Fund in accordance with Clause 3 of Sixth Schedule of SEBI (Mutual Funds) Regulations, 2026.
The Scheme will not invest in securitized debt, ADR, GDR, Overseas Securities, InvITs, Fund of Fund Scheme, Credit default swaps, unrated debt and money market instruments (except G-Secs, T-Bills and other money market instruments), Debt Instruments with special features (AT1 and AT2 Bonds), Debt Instruments with SO / CE, nor will it engage in short selling and Repo in corporate debt.
Exposure to equity derivatives of the index itself or its constituent stocks may be undertaken when equity shares are unavailable, insufficient or for rebalancing at the time of change in index or in case of corporate actions for a temporary period. The notional exposure of the Scheme in Equity Derivative instruments shall be restricted to 20% of the net assets of the scheme. Such exposure to derivatives will be rebalanced within 7 days.
The cumulative gross exposure through Equity shares, Money Market Instruments and Derivatives position shall not exceed 100% of the net assets of the Scheme as per Clauses 13.18 of SEBI Master Circular dated March 20, 2026.
As per SEBI Letter dated 3rd November 2021 Cash and cash equivalents having residual maturity of less than 91 Days are not considered for the purpose of calculating gross exposure limit.
The scheme may engage in Securities Lending not exceeding 15% of the net assets of the scheme and shall not lend more than 5% of its Net Assets to a single counterparty (here counterparty means an intermediary/broker through whom we deal in securities) or such other limits as may be permitted by SEBI from time to time after seeking necessary approval, whenever required.
Indicative Table (Actual instrument/percentages may vary subject to applicable SEBI circulars) Sl. Type of Instrument Percentage Circular references No of exposure
1. Securities Lending 0-15% SEBI (Mutual Funds) Regulations, 2026, Securities Lending Scheme, 1997 and Clause 13.6 of SEBI Master Circular dated March 20, 2026
2. Equity Derivatives for non- 0-20% Clause 13.15 of SEBI Master Circular dated March hedging purposes 20, 2026
3. Securitized Debt Nil Clause 13.1(2) of SEBI Master Circular dated March 20, 2026
4. Overseas Securities Nil Clause 13.11 of SEBI Master Circular dated March 20, 2026
5. InVITS Nil i. Units of InvIT Clause 13.13 of SEBI Master Circular dated March 20, 2026 ii. Units of InvIT issued by a single issuer
6. AT1 and AT2 Bonds Nil Clause 13.1(9) of SEBI Master Circular dated March 20, 2026
67. Unlisted Non-Convertible Nil Clause 13.1(3) of SEBI Master Circular dated March Debentures (NCDs) 20, 2026
8. * Unsupported rating of debt Nil instruments (i.e. without factoring-in credit Clauses 13.1(10) of SEBI Master Circular dated enhancements) is below March 20, 2026 investment grade and Supported rating of debt instruments (i.e.
after factoring-in credit enhancement) is above investment grade at Scheme level.
9. * Unsupported rating of debt Nil instruments (i.e. without factoring-in credit Clauses 13.1(10) of SEBI Master Circular dated enhancements) is below March 20, 2026 investment grade and Supported rating of debt instruments (i.e.
after factoring-in credit enhancement) is above investment grade for any group on debt portfolio of the schemes.
10. Repo transactions in corporate Nil Clauses 13.8 of SEBI Master Circular dated March debt securities 20, 2026
11. Schemes of Nippon India Mutual 0-5% Fund and/ or any other mutual Clause 3 of Sixth Schedule of SEBI (Mutual Funds) fund which invest in the money Regulations, 2026 market securities or Liquid Schemes * Of Debt portfolio.
For details, refer Annexure 1.
XI. Fund manager details The details of Fund Manager of the Scheme are as follows:
Name Managing since Total experience (in years) Mr. Jitendra Tolani This is a new scheme hence not applicable. Over 20 years XII. Annual Scheme Actual TER % - This is a new scheme hence Actual TER% is not available.
Recurring Expenses For detailed disclosure, kindly refer https://mf.nipponindiaim.com/investor-service/downloads/scheme- information-document XIII. Transaction charges Transaction Charges: and stamp duty No transaction charges shall be deducted from the subscription amount for transactions /applications received through the distributors (i.e. in Regular Plan).
Stamp Duty on Allotment/Transfer of Units:
Clause no. 11.1 of SEBI Master Circular dated March 20, 2026, a stamp duty @ 0.005% of the transaction value would be levied on applicable mutual fund transactions, with effect from July 01, 2020.
1. The Stamp duty for transfer of units, if/where applicable, shall be payable by the transferor.
2. For calculation of the amount of stamp duty, the consideration value will be calculated as per the last available NAV (irrespective of the amount of consideration mentioned by the transferor in the transfer request).
3. The stamp duty if/where applicable, shall be collected by the RTAs from the transferor through online mode by ensuring that the payment is received from the bank account registered in the folio.
For further details, please refer to SAI.
XIV. Information available For following information, kindly refer the weblink as under: through weblink Particulars Link Liquidity/listing details NAV disclosure Applicable timelines for dispatch of redemption proceeds etc
https://mf.nipponindiaim.com/investor-service/downloads/scheme- Breakup of Annual Scheme Recurring information-document expenses 7Definitions Applicable risk factors Detailed disclosures regarding the index, index eligibility criteria, methodology, index service provider, index constituents, impact cost of the constituents/ underlying fund in case of fund of funds
List of official points of acceptance https://mf.nipponindiaim.com/investor-services/customer- service/locate-a-branch Penalties, Pending Litigation or https://mf.nipponindiaim.com/investor-service/downloads/scheme- Proceedings, Findings of Inspections or information-document Investigations
Investor services https://mf.nipponindiaim.com/investor-service/downloads/scheme- information-document
Portfolio Disclosure https://mf.nipponindiaim.com/investor- service/downloads/factsheet-and-other-portfolio-disclosures
Detailed comparative table of the https://mf.nipponindiaim.com/investor-service/downloads/scheme- existing schemes of AMC information-document Scheme performance Not applicable as this is a new scheme. Thereafter, is shall be
available on https://mf.nipponindiaim.com/investor- service/downloads/scheme-information-document ______
Periodic Disclosures https://mf.nipponindiaim.com/investor- service/downloads/scheme-information-document Scheme specific disclosures (as per the https://mf.nipponindiaim.com/investor-service/downloads/scheme- prescribed format) information-document
Scheme Factsheet https://mf.nipponindiaim.com/investor- service/downloads/factsheet-and-other-portfolio- disclosures XV. How to Apply Investors can apply for their transactions requests offline using the relevant transaction request forms available on
our website https://mf.nipponindiaim.com or at any of our Designated Investor Service Centers (DISCs) / Officials Points of Acceptance (OPAs).
Please refer to the SAI for detailed procedure and Application form for the instructions.
XVI. Where can applications The applications filled up and duly signed by the applicants should be submitted at the office of the Collection for subscription/ Centres / DISCs / Official Points of Acceptance or may be downloaded from the website of AMC. The list of the redemption/ switches Designated Investor Service Centres (DISCs)/Official Points of Acceptance (OPAs) of the Mutual Fund are available be submitted on the website of the AMC i.e. https://mf.nipponindiaim.com. Please refer to the SAI for detailed procedure and Application form for the instructions.
List of official points of acceptance, collecting banker details - Please visit
https://mf.nipponindiaim.com/investor-services/customer-service/locate-a-branch As per the directives issued by SEBI, it is mandatory for an investor to declare his/her bank account number in the application form. This is to safeguard the interest of unitholders from loss or theft of their redemption cheques / DDs.
Additionally, if the bank details provided by investors are different from the details available on instrument, AMC may seek additional details from investors to validate the bank details provided by investors.
For detailed disclosure, kindly refer SAI XVII. Specific attribute of the Not Applicable scheme (such as lock in/ duration in case of target Maturity scheme/close ended schemes etc.) (as applicable) XVIII. Special product/facility Special product/facility available during the NFO available during the NFO and on ongoing A. SPECIAL PRODUCTS basis 1. Systematic Investment Plan (SIP) B. SPECIAL FACILITIES
1. Auto Switch Facility 8This fund will offer an auto switch facility from all liquid and debt schemes to Nippon India Nifty India Defence Index Fund during the NFO. However, NAM India reserves the right to extend or limit the said facility on such terms and conditions as may be decided from time to time
2. Applications Supported by Blocked Amount (ASBA) facility ASBA facility will be provided to the investors subscribing to NFO of the Scheme. It shall coexist with the existing process, wherein cheques are used as a mode of payment. Detailed provision of such facility has been provided in SAI.
3. Switch-out facility from applicable ETF schemes to Nippon India Nifty India Defence Index Fund For availing this facility, investors are requested to note the following operational modalities: a. Switch-out from the Scheme will be allowed only in terms of Basket size (unit).
b. Switch transaction will be processed subject to availability of all details as per regulatory guidelines. c. The applicability of the NAV in the transferee Scheme will be the NAV of the business day on which the Funds are realized in Scheme’s account before cut-off time.
d. In case of any rejection in Switch-in to the transferee Scheme, the amount will be paid to the investor as redemption proceeds. e. Investors to note that the pattern and sequence of holding both in the open-ended (Non-ETF) Folio and in demat account (used for ETF unit holding) should be same. However, in case there is no existing Folio, the investor has to provide the details and signatures of all holders for Folio creation in the open-ended (Non-ETF) Scheme.
f. Investors should have the clear balance of ETF units in their demat account for execution of the Switch-out transaction from the selected ETF Scheme.
Special product/facility available during the ongoing basis A. SPECIAL PRODUCTS
1. Systematic Investment Plan (SIP)
2. Systematic Transfer Plan (STP)
3. Systematic Withdrawal Plan (SWP)
4. Trigger Facility
5. Nippon India SMART STEP For detailed disclosure of above special products / facilities, kindly refer SAI.
NIMF/NAM India reserves the right to introduce, change, modify or withdraw any of the features available in this facility from time to time.
XIX. Segregated portfolio/ The scheme has segregated portfolio disclosure. For Details Disclosure, kindly refer SAI side pocketing disclosure XX. Stock lending/short Securities Lending selling The scheme may engage in Securities Lending not exceeding 15% of the net assets of the scheme and shall not lend more than 5% of its Net Assets to a single counterparty (here counterparty means an intermediary/broker through whom we deal in securities) or such other limits as may be permitted by SEBI from time to time after seeking necessary approval, whenever required.
For details please refer SAI.
Short Selling The Scheme will not invest in Short Selling 9Annexure 1 Equity derivatives of underlying Calculation of cumulative gross exposure securities forming part of the index The cumulative gross exposure through Equity shares, Money Market Instruments and Derivatives position shall not may also be available as an investment option in case the exceed 100% of the net assets of the Scheme as per Clauses 13.18 of SEBI Master Circular dated March 20, 2026.
underlying security is not available As per SEBI Letter dated 3rd November 2021 Cash and cash equivalents having residual maturity of less than 91 Days for purchase. are not considered for the purpose of calculating gross exposure limit. Cash Equivalents include Government Securities, T-Bills and Repo on Government Securities having residual maturity of less than 91 days.
Numerical example of risk involved
The few risks of using derivative strategies could be on account of: • Illiquidity. • Potential mis - pricing of the Futures/Options. • Inability of derivatives to correlate perfectly with the underlying (Indices, Assets, Exchange Rates).
• Cost of hedges can be higher than adverse impact of market movements. • Exposure to derivatives can also limit the profits from a genuine investment transaction. • The prices which are seen on the screen need not be the same at which execution will take place.
Numerical example:
Scheme ABC has to buy 2000 shares of stock A (constituent of the scheme). However, due to illiquidity or a corporate action the stock isn’t available in the secondary market. The futures of stock A is trading at a fair price (adjusted of cost of carry) and offers enough liquidity.
Date of Transaction April 02,2026 Fair Price of Stock A Rs. 100 Expiry Date of Future Contract April 26, 2026 Price of Future Stock A (Sep expiry) Rs. 102 No. of shares of Stock A in 1 contract 2000 Value of 1 contract = 102*2000 Rs. 2,04,000 Margin (%) 10% Margin (in Rs.) Rs. 20,400 Holding Period 10 days On 10th day the future contract was sold, and the underlying stock was bought in the secondary market as it was trading at a fair price and had enough liquidity.
Stock A was trading at Rs 105 on April 10, 2026.
The financial impact of the position is dependent on the price of futures contract with respect to that of the price of the stock in the cash market on the date of reversal of the trade. That impact is visible in the basis (the difference in the price of future contract and spot price of stock A). Higher basis indicates the difference has widened and vice a versa.
On April 2, 2026, the basis between the stock and its future contract was Rs 2. Assuming the same basis the fair price of future of stock should be Rs 107.
The various scenarios of the futures price of stock A on April 10, 2026 are as follows:
1. The basis remains constant i.e. Rs 2.
2. The basis expands and the futures of stock A trade more in premium to the spot.
3. The basis narrows to Re 1.
4. The basis falls to zero.
5. The basis becomes negative and the futures of stock A trades in discount to the spot.
The P&L arising from these scenarios are illustrated in the following table:
P&L (Basis * No. of Futures Change in Scenario Basis Value Spot Price No. of Lots stocks in lot Price Basis * No. of lots) (in Rs.) Basis stays 2 105 107 1 0 0 same 10Basis widens 4 105 109 1 2 4000 further Basis 1 105 106 1 -1 -2000 narrows Basis 0 105 105 1 -2 -4000 becomes 0 Basis turns -2 105 103 1 -4 -8000 negative Disclosure relating to extent and manner of participation in derivatives to be provided Exposure to equity derivatives may be undertaken when equity shares are unavailable, insufficient or for rebalancing at the time of change in index or in case of corporate actions for a temporary period. The notional exposure of the Scheme in Equity Derivative instruments shall be restricted to 20% of the net assets of the scheme. Such exposure to derivatives will be rebalanced within 7 days.
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