SBERB’s new NIFTY50-linked mutual fund to allow Russian investors access to Indian stock market

Sberbank, Russia's largest bank and JSC First Asset Management have introduced a new mutual fund, First-India, offering investments linked to the performance of the NIFTY50 index.

This move will provide Russian retail investors with direct exposure to India's stock market.

The announcement came amid Russian President Vladimir Putin's nearly 27-hour visit to New Delhi that began on Thursday, December 4.

The launch of the fund was announced at an event at the National Stock Exchange of India (NSE) by Sberbank CEO and Chairman of the Executive Board Herman Gref during his business visit to India, the bourse said in a press release on Thursday.

Commenting on the development, Herman Gref said, “We are opening another window of investment opportunities for our Russian clients, this time to South Asia. Our new product provides a convenient way to gain exposure to one of the world’s key economic markets—the Indian stock market.”

He stated that there were no other straightforward options for Russian investors seeking personal investments in Indian assets, and added that, “we have created a new and efficient financial bridge between the two countries."

“This initiative reflects strong confidence in India’s markets and deepens the India–Russia financial cooperation. NSE is committed to partnering with Sberbank to enhance market connectivity, uphold regulatory and investor-protection standards, and build liquidity and transparency for these products as we create new opportunities for investors in both countries,” Ashishkumar Chauhan, MD & CEO of NSE, said.

NIFTY50 Index is a flagship index on the NSE, comprising stocks from the country's top 50 companies by market capitalisation. It is one of the most widely followed equity indices among market participants globally.

In India, there are over 45 passive funds that track the NIFTY50, while an additional 22 passive funds outside India track the NIFTY50 index.

Sberbank launches rupee-denominated letter of credit for Indian suppliers

On December 2, Sber launched a rupee-denominated letter of credit with deferred payment for purchases in India, a new financial product for importers.

The solution is unique in that Sber will settle payments with Indian suppliers in rupees immediately upon submission of supporting documents for the delivery of goods to the bank, while providing the Russian buyer with the option to reimburse the payment later when the deferral period ends, the bank said.

The structure of the transaction utilising a letter of credit will reduce potential risks. At the same time, the use of deferred payment will increase the attractiveness of the deal terms for all participants, the statement said.

Sber's new tool will assist medium and large businesses in purchasing from both new and current Indian partners, it added.

The bank can finance up to 100% of the cost of a shipment from India, with the interest rate for using the deferred payment being several points lower than the rate for a ruble loan, said Anatoly Popov, Deputy Chairman of the Executive Board, Sberbank.