ICICI Prudential Regular Savings Fund ICICI Prudential Regular Savings Fund (An Open Ended Income Fund) (An Open Ended Income Fund) Offer of Units at Rs. 10/- each for cash during the New Fund Offer and thereafter on continuous basis at NAV related prices. Only for distributors The information contained herein are strictly confidential and are meant solely for the benefit of the addressee and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Prudential Asset Management Company Limited. All data / Information used in the preparation of this material is dated and may or may not be relevant any time after the issuance of this presentation. Mutual Fund Investments are subject to market risks. For Statutory details, risk factors, disclaimers refer to slide No. 19 & 20. NFO period: From Nov 15, 2010 to Nov 29, 2010
Presentation Structure Presentation Structure 1. What is ICICI Prudential Regular Savings Fund? 2. Why is the offering attractive now? 2 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
What is ICICI Prudential Regular Savings Fund? What is ICICI Prudential Regular Savings Fund? 3 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
What is ICICI Prudential Regular Savings Fund? What is ICICI Prudential Regular Savings Fund? Investment Approach � Focus on accrual income � Limited volatility. Invest primarily into non-Gilt issuances � Investment grade fixed income securities across the yield curve � Yield enhancement through researched credits / structures � Strive for healthy yields for a 1 year plus investment horizon � Provide an ideal fixed income asset allocation avenue for investors 4 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
What is ICICI Prudential Regular Savings Fund? What is ICICI Prudential Regular Savings Fund? Fund Positioning LOW DURATION RISK HIGH � Moderate duration – maturity LOW LIQUID in the range of 3 years USTP � Limited or Nil exposure to VOLATILITY Gilts STP RSF � Positioned between a Short Term Plan and an Income INCOME Plan in terms of risk-return HIGH profiling GILT 5 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
What is ICICI Prudential Regular Savings Fund? What is ICICI Prudential Regular Savings Fund? Investment Strategy � Aim to identify securities that offer superior levels of yield at lower levels of risks � Primarily buy and hold strategy thereby managing a stable duration; duration management will be strategic and directional only � Universe to consist of debt securities across type of issuers, instrument type and credit ratings (AA- limited to specific researched names) Moving Across the Yield Curve (Investment Grade Securities) 13% 12% 11% 10% 9% 8% 7% Gilt AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- Source: Crisil Bond Valuer Matrix (25/10/2010) 6 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
What is ICICI Prudential Regular Savings Fund? What is ICICI Prudential Regular Savings Fund? Debt Investment Philosophy � Minimize credit risk - Majority of investment in above AA-/P1+ rated assets � Independent credit research SAFETY − Due diligence to evaluate a borrower's ability and willingness to repay the debt on time − Investment in entities with large and diversified client base LIQUIDITY RETURN − Emphasis on strong parentage − Companies having a well diversified mix of businesses � Derisk the portfolio on downgrades � Strict adherence to regulatory limits and controlled through deal entry system Our Debt Investment Philosophy is with reference to investments in securities made by Schemes of ICICI Prudential Mutual Fund. There is no assurance or guarantee of principal and/or returns offered to the Investor 7 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
What is ICICI Prudential Regular Savings Fund? What is ICICI Prudential Regular Savings Fund? Debt Investment Philosophy � Endeavor to minimize liquidity risks SAFETY � Asset-liability match and stress test � Aims to maintain high quality portfolio investments from liquidity perspective LIQUIDITY RETURN � History of redemption payments within timelines even during difficult times Our Debt Investment Philosophy is with reference to investments in securities made by Schemes of ICICI Prudential Mutual Fund. There is no assurance or guarantee of principal and/or returns offered to the Investor 8 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
What is ICICI Prudential Regular Savings Fund? What is ICICI Prudential Regular Savings Fund? Debt Investment Philosophy � Optimize return per unit of risk SAFETY � Endeavor to maintain consistency in performance � Focus on returns without undue risks in the portfolio LIQUIDITY RETURN � Generally maintain cash holding to the extent to meet liquidity requirement Our Debt Investment Philosophy is with reference to investments in securities made by Schemes of ICICI Prudential Mutual Fund. There is no assurance or guarantee of principal and/or returns offered to the Investor 9 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
What is ICICI Prudential Regular Savings Fund? What is ICICI Prudential Regular Savings Fund? Who Should Invest / Ideal for � Conservative investors who do not want to take a call on interest rates and earn current market rates in a volatile interest rate scenario � Investors looking to earn returns from accrual income through investment in debt securities with a low to medium mark to market risk � Investors ready to invest in a disciplined manner with a minimum investment horizon in mind (typically 12 months or more) � Investors looking to earn tax-efficient returns 10 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
Why is the offering attractive now? Why is the offering attractive now? 11 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
Why is the offering attractive now? Why is the offering attractive now? Issuance and Yields show signs of Peaking Pref efer eren ence for Debt O Over E Equity T Through C Cycle 60 12M rolling issuances (US$ bn) � Historically, Corporate India has 50 Debt I De Issuance ces preferred debt funding over equity 40 Equity Issuances funding in times of economic 30 uncertainty 20 10 0 � With economic activity picking up 1993 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2008 2009 2010 and capacity expansion underway, Yield and Issuance Cycle equity funding is expected to outpace debt funding on an Peak incremental basis Strengthening � As such, corporate yields are at Weakening elevated levels with limited scope Trough of rising from these levels Data Source: Morgan Stanley 12 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
Why is the offering attractive now? Why is the offering attractive now? Funding Supply to get Augmented � Overall macro funding is expected to remain strong and domestic debt issuance will probably continue to rise � Credit funding by banks is expected to improve on the backdrop of improving deposit growth � Incremental credit demand will be met with increased supply from banks; keeping corporate yields under check Data Source: Morgan Stanley 13 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
Why is the offering attractive now? Why is the offering attractive now? Improving Credit Quality - Benign for Yields MCR Trends IIP GDP MCR 14.0% 1.4 12.0% 1.2 � Robust economic growth and a 10.0% 1.0 conducive funding environment 8.0% 0.8 have resulted in the CRISIL MCR 6.0% 0.6 4.0% 0.4 exceeding 1 time after a gap of three 2.0% 0.2 and half years 0.0% 0.0 Distribution of Outlook across categories � During H1 2010-11, the upgrade rate Downgrade Rate Upgrade Rate 8.0% stood at 5.4%; while the proportion 7.0% of ratings downgraded declined 6.0% 5.0% significantly to 2.4% indicating an 4.0% improving trend 3.0% 2.0% 1.0% 0.0% H1-09 H2-09 H1-10 H2-10 H1-11 Data Source: CRISIL 14 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
Why is the offering attractive now? Why is the offering attractive now? Liquidity - Possible Leakages in Sterilization Possible leakage if excess liquidity is not completely sterilized 15 Please read the Scheme Information Document and detailed risk factors carefully before investing. Strictly Private & Confidential
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