Upcoming NFO: DSP Mutual Fund Files Draft Papers for BSE MidSmall Private Banks ETF

DSP Mutual Fund has filed a draft Scheme Information Document (SID) with the Securities and Exchange Board of India (SEBI) for the proposed DSP BSE MidSmall Private Banks ETF. 

The scheme is structured as an open-ended exchange traded fund (ETF) that will track the BSE MidSmall Private Banks Index. According to the draft, the objective is to generate returns that broadly correspond to the performance of the underlying index, subject to tracking error.  

The document also notes that achieving the investment objective is not guaranteed.  

How the Scheme Will Invest? 

The proposed ETF will follow a passive investment strategy. Under normal market conditions, 95% to 100% of the portfolio will be invested in equity and equity-related securities that are part of the BSE MidSmall Private Banks Index.  

The remaining 0% to 5% may be held in cash and cash equivalents. The scheme may also use equity derivatives for portfolio rebalancing or when index constituents are temporarily unavailable, in line with SEBI regulations.  

The draft states that the portfolio will be rebalanced within seven calendar days if deviations arise.  

Index Composition 

The underlying index consists of 18 listed private sector and small finance banks. Based on the index composition as of 30 June 2026, Federal Bank has the highest weight at 17.99%, followed by IndusInd Bank (13.38%), AU Small Finance Bank (12.88%), IDFC FIRST Bank (11.66%) and Yes Bank (9.40%).  

Other constituents include Karur Vysya Bank, Bandhan Bank, City Union Bank, RBL Bank, South Indian Bank and Karnataka Bank. The index is reviewed twice a year, while constituent weights are rebalanced every quarter.  

Subscription and Trading 

The units are proposed to be listed on both the NSE and BSE. During the New Fund Offer (NFO), the minimum investment amount has been set at ₹5,000, with further investments allowed in multiples of ₹1.  

After listing, units can be bought or sold on the exchanges in lots of one unit. The draft document states that no exit load will apply under the scheme, while the NFO dates will be announced separately.  

Read More: NFO Alert: Bajaj Finserv Mutual Fund Launches BSE Top 10 Banks ETF! 

Conclusion 

The draft scheme document outlines the proposed investment framework, portfolio allocation, benchmark methodology and subscription terms for the ETF. The scheme will proceed after regulatory review and the announcement of the New Fund Offer schedule. 

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Mutual Fund Investments are subject to market risks, read all the related documents carefully before investing.