Betting on disruption, reforms: Decoding Motilal Oswal's new thematic fund

Business Standard

3 days ago

The Indian equity market is a bit like life—full of surprises. Some companies ride the wave of disruption, some transform through policy changes, while others emerge stronger from temporary setbacks. What if you had a fund that was designed to spot these 'inflection points' and ride the wave early?
Motilal Oswal Mutual Fund has launched a new thematic offering—the Motilal Oswal Special Opportunities Fund—that aims to do just that. This open-ended equity scheme opens for subscription on July 25, 2025, and closes on August 8, 2025.
What is a "Special Situation"?
Special situations are events that can impact a company's value drastically—think mergers, acquisitions, regulatory reforms, temporary setbacks, or even structural industry shifts. The fund's strategy is to capitalize on these transitional phases by identifying fundamentally strong businesses that are navigating change.
Some examples include:
Companies benefiting from PLI schemes or infrastructure reforms
Firms facing temporary headwinds due to macro changes or industry shakeups
Businesses restructuring due to M&A or demergers
Upcoming IPO-bound firms or new-age sectors
These are often the kinds of opportunities missed by traditional funds due to timing or perceived risk.
What's the Fund's Strategy?
The fund will use Motilal Oswal's proven QGLP framework:
Quality of business
Growth potential
Longevity in operations
Price that makes sense
It's designed to be a high-conviction, focused portfolio, managed by a team of seasoned experts including Ajay Khandelwal and Atul Mehra for equities, and Rakesh Shetty for debt.
This is not a fund that spreads itself thin. It will be selective, making bold bets where the fund managers see transformative potential.
The fund seeks to benefit from company specific (events/ developments), sectoral, or macroeconomic events such as corporate actions, regulatory or policy changes, mergers and acquisitions, or temporary disruptions. The fund is suitable for investors seeking to invest predominantly in equities and equity related instruments following a special situations theme and aiming for Capital appreciation over long term.
Who Should Consider This?
This fund is not for the faint-hearted. It is meant for:
Long-term investors with a 5-year+ horizon
Those who believe in thematic investing
Investors comfortable with concentration risks and volatility
Someone looking to diversify away from traditional blue-chip or index-heavy funds
It's important to remember that thematic funds can underperform during market phases where their specific theme is out of favor.
Benchmark & Structure
Benchmark: Nifty 500 TRI (Total Return Index), giving it a broad comparison base
Structure: Open-ended equity scheme
Post-NFO listing: August 21, 2025
Unlike diversified funds, this one follows a special situations theme, meaning your returns will be heavily dependent on how these niche bets play out.
Investment Objective:
The primary objective of the scheme is to achieve long term capital appreciation by investing in opportunities presented by special situations such as corporate restructuring, mergers & acquisitions, government policy and/or regulatory changes, disruption, upcoming and new trends, new & emerging sectors, companies/sectors going through temporary unique challenges and other similar instances. However, there is no assurance that the investment objective of the scheme will be achieved.
"Manufacturing, services, FDIs, and exports are expected to grow significantly, supported by structural reforms like PLI, RERA, and Atmanirbhar Bharat. We believe that corporate actions and macro shifts may continue to create special opportunities capable of disrupting markets. The fund will follow a blend of bottom-up stock picking and top-down analysis to identify companies navigating such transformative phases. This may span sectors like chemicals, EMS, infrastructure, defence, hospitality, healthcare, and IPO-bound firms. As growth-oriented managers, our aim is to align with India's evolving economic landscape and seek long term capital appreciation," said Ajay Khandelwal, Fund Manager at MOAMC.
This fund could make sense as a satellite allocation—a smaller part of your portfolio intended to deliver alpha or capture a specific trend. But don't confuse it with a core holding that provides stability and steady returns.
If you:
Already have a diversified portfolio
Are looking to spice it up with a high-conviction idea
Can handle cycles of underperformance
…then this fund could be worth considering.
However, do consult your financial advisor to evaluate if this aligns with your risk profile and goals.
The Fund will be managed by Ajay Khandelwal (Fund Manager – Equity component), Atul Mehra (Fund Manager – Equity component), Bhalchandra Shinde (Associate Fund Manager – Equity Component), Rakesh Shetty (Fund Manager - Debt Component), and Sunil Sawant (Fund Manager - Overseas Securities).
"The Motilal Oswal Special Opportunities Fund is intended for investors seeking to benefit from evolving market dynamics driven by special situations such as policy reforms, corporate actions, and structural shifts across sectors. Leveraging our research-led QGLP investment framework, the fund seeks to build a focused portfolio of companies navigating such transitions, with an emphasis on long-term capital appreciation," said Prateek Agrawal, Managing Director ('MD') and Chief Executive Officer ('CEO') at Motilal Oswal Asset Management Company Ltd (MOAMC).