SIG1 pledges 15% cash dividend despite reserving 5% profit for current FY

ShareSansar, September 2:

Siddhartha Investment Growth Scheme-1, a closed-end 5 years mutual fund scheme managed by Siddhartha Capital Limited, has decided to pledge 15 percent cash dividend to its unit holders for the last fiscal year 2070/71.

A meeting of Board of Directors of Siddhartha Capital took the decision to this effect on Monday, its Chief Executive Officer Dhurva Timilsina told ShareSansar.

“We could have actually pledged up to 20 percent cash dividend, but it is prudent to keep some of the distributable profit in reserve so that we can pledge attractive dividend for this year, too,” he said, adding that they have kept aside 5 percent dividend for the current fiscal year.

SIG1 had posted an impressive net profit of Rs 51 crore in the last fiscal year.

He further said that the unit holders can expect at least similar dividend for the current fiscal year, too.

It should be noted here that no mutual fund operators pledge bonus share to its unit holders as per the law of the land and accepted practice elsewhere.

'Cent percent return'

Stating that SIG1’s NAV as of the last week stands at Rs 20.006, he added that this clearly shows that it is already in the position to provide 100 percent return to its unit holders who subscribed the scheme.

It may be noted that though the NAV will be adjusted to Rs 18.5 following the dividend, Timilsina clarified that it will surely hover around Rs 20 or even higher within a few days.

“The best thing is that the investors have now realized that the mutual fund scheme is very profitable even in a sluggish market,” he added. “Given the situation, we are quite upbeat for the current fiscal year and years to come.”

SIG1 was last traded for Rs 16.5 per unit, which also provides a good opportunity for investors to cash in on the scheme.

SIG1 had pledged 4.5 percent dividend to its unit holders last year, but the dividend was from just the six months of the previous fiscal year as the scheme was launched toward the middle of that fiscal year.