Face to face with Anand Vardarajan, Chief Business Officer, Tata Asset Management

We believe that Indian tourism is experiencing massive growth and passing through a very exciting phase.

Q. Tell us about the Nifty India Tourism Index Fund. Where are we in the hotel industry upcycle?

Last year contribution of IT sector to GDP was $187 bn while tourism emerged as the number one sector at $212 Bn. Contrast this with the conspicuous absence of the tourism sector’s representation in Nifty 50, that tells you a completely different story of the opportunity ahead. This lack of representation highlights the untapped potential and opportunity within the tourism sector.

Addressing the question of the hotel industry, we find that it has been reaching new highs in terms of occupancy rates. Previously, 65 percent was considered standard for the hotel industry. However, for the first time, we are seeing 70 percent occupancy rates in hotels, marking a new record after a very long time. This bodes very well for tourism.

We plan to comprehensively capture the entire tourism value chain, including aviation, airports, hotels, quick service restaurants (QSR), luggage business, and booking services. We believe this approach captures the entire value chain beautifully and presents a significant opportunity.

As income levels rise and discretionary spending increases, we believe travel could see meaningful share in the spends. We see immense potential in this space, and Tata Nifty India Tourism Fund aims to harness this opportunity in the sector.

Q. What is the thought behind the launching of seven sectoral index funds in a short span of time? Was it planned that way, or you just went with the flow?

The passive fund category has been growing at a rapid pace. We decided to offer a comprehensive range of sectoral index funds for investors to choose from.