WASHINGTON, D.C., Oct. 25 - The International Finance Corporation (IFC) is to invest up to Indian Rs. 225 million (about US$7.3 million) in Taurus the Starshare, a closed-end growth-oriented mutual fund, to be listed on stock exchanges in India. IFC will also invest up to Indian Rs. 10 million (about US$0.3 million) in Creditcapital Asset Management Company Limited (CAMCO), the manager of the fund. IFC signed the subscription agreement in Bombay today. This is IFC's first investment in an Indian mutual fund. The fund will have a five-year life and will operate under the regulations of the Securities and Exchange Board of India. It is the first scheme marketed by Taurus Mutual Fund, which is managed by CAMCO. CAMCO is one of India's first private sector mutual fund management companies. Its major shareholder is Creditcapital Finance Corporation, a leading merchant bank, which will hold at least 51 percent of the equity. IFC will hold up to 20 percent in CAMCO, and the balance will be held by other internationa
l institutional investors. Following the overall liberalization of the Indian economy, private investors are becoming increasingly active in the financial sector. The launching of private sector mutual funds will help to develop the capital markets. Other benefits will include increased liquidity in the marketplace, a more efficient mobilization of savings, the channelling of investments along commercial lines, the establishment of research standards, and better monitoring of corporate performance. IFC is the private sector arm of the World Bank Group and the largest source of multilateral financing for private sector projects in developing countries.
