Fidelity India has come up with new equity fund called Fidelity India Value Fund. Lets do a review and analysis and get into finer details of the New Fund Offer.

The new fund offer (NFO) open for subscription from November 16 to December 15, 2009. The face value of the NFO will be Rs 10 per unit and offers growth option and dividend option. The dividend Option offers dividend payout and dividend re-investment. The minimum application amount is Rs 5000 per application. For additional purchase minimum application amount is Rs 1000. Entry Load – Nil, Exit load – 1% For redemption within 1 year.

Fidelity as a fund house is always my favorite fund house with good returns and Nitin Bajaj who will be the fund manager of Fidelity India Value Fund currently manages Fidelity India special situations fund and I have seen good track record of Fidelity India special situations fund.

The objective of this fund is to invest in undervalued stocks and will invest at least 80 percent of the assets in equities and the rest in exchange-traded funds, debt and money market instruments.

FIL Capital Advisors (India) Private Limited, the Indian private equity arm of Fidelity International, may be close to picking up a minority stake in Ahmedabad-based mid-sized biopharma player Intas Biopharmaceuticals for a sub-$20-million investment, a source familiar with the development said.

Intas Biopharmaceuticals, a group company of Ahmedabad-based Intas Pharma, a Rs 1,100-crore company, is engaged in the manufacturing of biopharmaceutical products.

It could not be immediately ascertained if other private equity players were in the fray for investing in Intas Biopharmaceuticals.

The talks between Fidelity and Intas Biopharma have made substantial progress even though a definitive pact is not in place yet, a source familiar with the process added. In response to the development, a company spokesperson said, “Intas Biopharmaceuticals is a fast growing company and there is lot of interest from investors to make private equity investment in our company.” This is not the first instance of institutional money coming into the company. In 2007, Kotak Private Equity invested $10 million in Intas Biopharma.

Fidelity declined to comment on the transaction. It is learnt that the PE arm is looking at the biotech space in a big way. It already has an investment in biotech firm Avesthagen, which is planning to go for a Rs 700 crore IPO later this year.

There have been several PE investments in the biopharma space given the potential of the global opportunity. Sample some of these deals: Itero Biopharmaceuticals raised $21 million from Biotechnology Venture Fund while Indus Biotech raised funds from Kotak India Venture Fund I. Another funded player is Hyderabad-based Bharat Biotech in which ICICI Venture and IFC hold a 20% stake. Siro Clinpharm , a Mumbai-based clinical research organisation in the biotech space, raised funding from 3i Group and Kotak Private Equity.

Biosimilars, the counterpart of generics in the pharma industry, are expected to see a big wave of growth once the regulated markets of US and Europe open up.

A Mumbai-based lifescience analyst says, biopharma as a space is too nascent with the regulatory pathway still not open. So, the opportunity is relatively long term in nature