Summary of this article
ICICI Prudential Contra Fund NFO closes on October 12
Fund targets out-of-favour companies with potential recovery prospects
Contrarian investments may take considerable time to deliver returns
The scheme carries a very high risk classification
ICICI Prudential Mutual Fund has launched the ICICI Prudential Contra Fund, an open-ended equity scheme whose new fund offer (NFO) opened on September 28 and closes on October 12, 2026, according to a press statement issued by ICICI Prudential Mutual Fund.
The fund will look for companies whose share prices have fallen out of favour with investors, but where its managers see a case for recovery. That may mean buying into a business or sector while much of the market remains unconvinced. The difficult part is judging whether the setback is temporary.
What Will The Fund Buy?
The scheme can invest across sectors and companies of different sizes. ICICI Prudential says its stock selection will consider market valuations, the business cycle, possible triggers for change and investor sentiment. It will also examine debt levels, the scope for earnings to improve and whether a business faces lasting disruption.
3 September 2026
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S Naren, executive director and Chief Investment Officer, ICICI Prudential Mutual Fund, said, “Contrarian investing is not just about buying cheap. It requires robust research and a long-term outlook. The beauty of contrarian investing is that we will buy when a stock is out of favour, when there are more sellers than buyers, and the price has therefore fallen substantially.”
A share that has dropped sharply can look attractive against its earlier price. That alone does not make it a bargain. A company struggling with too much debt or a permanent change in its industry may have little prospect of returning to its former position. The fund house says it will be cautious about highly leveraged companies and businesses exposed to disruption.
The scheme will be managed by Sankaran Naren, Dharmesh Kakkad, Sakshat Goel and Gaurav Chikane. According to the release, a holding may be sold when the perceived pricing gap closes, sentiment changes, or the managers find a better opportunity.
What Should Investors Consider?
A contrarian fund can spend a long time waiting for its investment case to play out. An unpopular sector may recover later than expected, while a company’s prospects may deteriorate further. Investors could therefore see periods when the fund trails broader market indices or other equity funds.
Naren said, “The scheme has the flexibility to invest across market capitalisations, but our prime focus will be to identify underperformers. The key is to identify the suitable investment through research and have the patience to wait, because a contrarian situation does not turn around quickly.”
The scheme’s riskometer places it in the very high risk category. Anyone considering it should check whether they already own a contra fund or another actively managed equity fund taking similar positions. The fund’s eventual portfolio, costs and performance will matter more than the promise of buying before a recovery.
FAQs
What is a contra fund?
It buys shares that are out of favour when its managers believe the setback is temporary and the business has room to recover.
What is the main risk with this fund?
A recovery may take longer than expected or never happen. The scheme is classified as very high risk and may underperform for extended periods.
Must investors buy during the NFO?
No. The NFO deadline does not make the fund more attractive. Investors should first check whether the strategy fits their holdings and risk tolerance.
