Motilal Oswal Digital India Fund experienced a significant 5.19% NAV increase on Friday following the blockbuster debut of ESDS Software. According to reports from The Economic Times, the fund received an anchor allocation of 10.25 lakh shares in the ESDS IPO at ₹429 per share, worth approximately ₹44 crore. This investment represented nearly 5% of the fund's total assets of around ₹907 crore as of July 31, 2026. Fund manager Varun Sharma noted that "one of our anchor allocations from a recent IPO in this space saw a strong listing, which contributed to the fund's NAV movement on the day."
ESDS Software delivered exceptional returns, more than doubling from its issue price on September 4, closing at ₹908.40 with a gain of nearly 112%. As reported by The Economic Times, this surge helped lift the fund's NAV by 5.19% in a single day, significantly outperforming the benchmark Nifty 50's modest 0.1% gain. The stock remained locked at the 20% upper circuit at ₹1,090.05 on Monday, potentially providing additional gains for fund unitholders. Based on the fund's exposure to the stock, the latest rise could translate into an additional gain of around 1% for unitholders, assuming other portfolio holdings remain unchanged.
Such sharp single-day gains in equity fund NAVs are rare for diversified schemes, as they typically spread investments across a diversified portfolio to limit impact from sharp moves in single holdings. A 6-7% upmove in a fund's NAV usually represents 30-50% of a diversified equity scheme's average annual gains. The fund's top holdings include Eternal, PB Fintech, Coforge, Hexaware Technologies and One97 Communications. Motilal Oswal Digital India Fund invests across the broader technology ecosystem, spanning digital, internet, artificial intelligence, software and platform-led business models.
As reported by The Economic Times, technology funds have underperformed over the past year amid AI-led disruption, sharp rotation away from momentum sectors and cooling valuations. The BSE IT TRI declined 13.83% in the past year, while Motilal Oswal Digital India Fund has gained 3.29%. Fund manager Varun Sharma emphasized the focus remains on identifying well-run, scalable businesses with long-term structural growth potential rather than single events or listings. Future NAV increases are possible as ESDS Software continues its upward trend, with the fund's focus on "identifying well-run, scalable businesses with long-term structural growth potential rather than on any single event or listing."
