Tata Floating Rate Fund(IDCW)
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Business Overview
Tata Floating Rate Fund (IDCW) is a dynamic debt mutual fund designed to provide investors with a steady income while managing interest rate risk. Ideal for conservative investors seeking regular returns, this fund invests primarily in floating rate instruments, ensuring that your investment is less impacted by rising interest rates. With a focus on capital preservation and liquidity, it’s perfect for those looking to diversify their portfolio and achieve stable growth.
- Dynamic debt mutual fund for steady income
- Invests in floating rate instruments
- Minimizes interest rate risk
- Ideal for conservative investors
- Focus on capital preservation and liquidity
- Helps diversify investment portfolio
Investment Thesis
Tata Floating Rate Fund (IDCW) presents a compelling investment opportunity due to its strong promoter credibility, robust growth in digital services, and attractive valuation compared to peers. This fund is well-positioned to capitalize on evolving market dynamics, making it a prudent choice for retail investors seeking stability and growth.
- Backed by Tata Group, known for its strong corporate governance and reliability.
- Capitalizes on the growing demand for digital financial services in India.
- Offers competitive yields with lower interest rate risk due to floating rate structure.
- Valuation metrics are favorable compared to similar funds in the market.
- Ideal for conservative investors looking for steady income and capital preservation.
Peer Perspective
Tata Floating Rate Fund is currently trading at a slight premium compared to peers like HDFC Floating Rate Fund and ICICI Floating Rate Fund. A rerating could occur with improved margin stability and consistent growth in returns.
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10BusinessHighThe sector is stable with moderate growth potential.
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10GrowthHighConsistent revenue growth but profit margins are fluctuating.
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10ProfitabilityHighROE and ROCE are acceptable, but cash flow is inconsistent.
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8ValuationHighValuation metrics are slightly above peers.
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7BalanceHighDebt levels are manageable, but liquidity could be improved.
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9GovernanceHighPromoter holding is strong, but some concerns on disclosures.
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5DriversGoodLimited growth catalysts identified.
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2TechnicalsLowWeak market sentiment and low liquidity.