ESDS rally sparks 5.19% NAV jump in Motilal Oswal Digital India Fund
A recent IPO listing significantly boosted the Motilal Oswal Digital India Fund's net asset value. ESDS Software's stock more than doubled on its market debut, contributing to the fund's gain. This sharp rise in the fund's NAV is considered rare for diversified equity schemes. The fund manager noted the strong performance of an anchor allocation from the IPO. Future NAV increases are possible as…
Mumbai - Tech-focused Motilal Oswal Digital India Fund experienced a significant one-day jump in its Net Asset Value (NAV) following a strong debut for ESDS Software, a newly listed company. The fund's NAV surged by 5.19% on Friday, following ESDS Software's successful stock market entry. The fund secured a substantial anchor allocation of 10.25 lakh shares in ESDS Software's Initial Public Offering (IPO), valued at approximately ₹44 crore.
This investment represented nearly 5% of the fund's total assets, which stood at around ₹907 crore as of July 31, 2026. ESDS Software's stock price more than doubled from its issue price, closing at ₹908.40, marking a gain of nearly 112%. This surge in ESDS Software's stock price contributed to the fund's NAV growth, despite the broader Nifty 50 index only gaining 0.1%.
Motilal Oswal Mutual Fund's Varun Sharma, who manages the Digital India Fund, attributed the fund's NAV movement to the strong listing performance of ESDS Software. The fund's NAV may continue to rise further, with ESDS Software currently trading at the 20% upper circuit, potentially adding an additional 1% gain for unitholders.
Sharp single-day gains in equity fund NAVs are uncommon, as most funds diversify their investments across a range of stocks to mitigate the impact of drastic movements in any single holding. A 6-7% increase in a fund's NAV typically accounts for 30-50% of the average annual gains of a diversified equity scheme. Motilal Oswal Digital India Fund primarily invests in various technology sectors, including digital, internet, artificial intelligence, software, and platform-led business models.
The fund's top holdings include Eternal, PB Fintech, Coforge, Hexaware Technologies, and One97 Communications. Sharma emphasized that the fund's strategy focuses on identifying well-managed, scalable businesses with long-term structural growth potential, rather than capitalizing on any single event or listing. Technology funds have underperformed over the past year due to AI-driven disruption, a shift away from momentum sectors, and a cooling off in elevated valuations.
The BSE IT TRI index has declined by 13.83% over the same period, while the Motilal Oswal Digital India Fund has gained 3.29%.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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