"Tide is Turning" aims to simplify key pointers pertaining to the recent RBI's policy. It details newly introduced Standing Deposit Facility (SDF) and how with SDF, LAF (Liquidity Adjustment Facility) corridor will be restored back to pre-pandemic levels. Floating rate bonds can provide necessary cushion in such an rising rate environment.

1. Tide is Turning
1

2. Perspective
2

3. Perspective – RBI Policy
3
Status
Quo

4. Why are we saying in this way?
4
1. Introduction of Standing Deposit Facility (SDF)
2. RBI focus shift from growth to inflation
3. Inflation estimates revised sharply for FY 2022-23 from 4.5% to 5.7%
4. Language change completely :
accommodative stance “as long as necessary to revive and sustain growth on a durable basis…. while ensuring
that inflation remains within the target going forward” to “remain accommodative while focusing on withdrawal
of accommodation to ensure that inflation remains within the target going forward, while supporting growth”.
Source: The Reserve Bank of India (RBI); FY: Financial Year
The Reserve Bank of India (RBI) kept its policy rates and stance unchanged on April 8,
2022, however, following were the key pointers pertaining to the policy:

5. Earlier Liquidity Adjustment Facility (LAF) Corridor
5
Reverse Repo Rate
Repo Rate
MSF Rate Rate at which RBI lends to banks after exhausting
their normal limits
Rate at which RBI lends to banks at normal
rate
Rate at which RBI borrows from banks
LAF
Corridor
*RBI: The Reserve Bank of India; MSF: Marginal Standing Facility

6. Guiding Rate basis System Liquidity
6
Reverse Repo Rate
Repo Rate
MSF Rate Guiding rate in a very tight liquidity condition
Guiding rate in a normal liquidity condition
Guiding rate in an abundant liquidity condition
*MSF: Marginal Standing Facility

7. Earlier Liquidity Adjustment Facility (LAF) Corridor Rates
7
Reverse Repo Rate
Repo Rate
MSF Rate 4.25%
4.00%
3.35%
Source: RBI. Data as on April 11, 2022. *MSF: Marginal Standing Facility

8. SDF – A New LAF Corridor!
8
*RBI: The Reserve Bank of India MSF: Marginal Standing Facility; SDF: Standing Deposit Facility; LAF: Liquidity Adjustment Facility. Source: RBI. Data as on April 8, 2022.
On April 8, 2022, RBI introduced Standing Deposit Facility (SDF). SDF is an overnight deposit
facility that allows banks to park excess liquidity with RBI and earn interest.
Repo Rate
MSF Rate 4.25%
4.00%
SDF 3.75%
Reverse Repo Rate 3.35%
New
LAF
Corridor

9. SDF – A New LAF Corridor!
9
MSF: Marginal Standing Facility; SDF: Standing Deposit Facility; LAF: Liquidity Adjustment Facility. Source: RBI. Data as on April 8, 2022. *This will be an effective hike due to the introduction
of SDF. However, the reverse repo rate continues to remain at 3.35%.
With the introduction of Standing Deposit Facility (SDF) at 3.75%, LAF (Liquidity Adjustment
Facility) corridor was restored at 50 bps i.e. back to pre-pandemic levels
Repo Rate
MSF Rate 4.25%
4.00%
SDF 3.75%
Reverse Repo Rate 3.35%
New
LAF
Corridor
We believe, due to rising rate environment, Floating-rate bonds (FRB) may outperform all other
fixed-rate instruments
*40 bps
hike

10. Why Floating Rate Bonds?
10
1. Accrual enhancement with each reset
2. Mark to Market (MTM) Gain
3. Carry over normal instruments (e.g. 6 Month T-Bill)

11. Why Floating Rate Bonds?
11
1. Accrual enhancement with each reset
Date GOI FRB 2033 Coupon Resets 6M T-Bill
19-06-2020 4.65% 3.43%
22-09-2020 4.70% 3.48%
22-03-2021 4.70% 3.48%
22-09-2021 4.62% 3.40%
22-03-2022 5.53% 4.31%
08-04-2022* 5.72% 4.50%
Source: RBI. 6M T-Bill: 6 Months Treasury Bill. *Expected. GOI FRB 2033: Government of India 2033 Floating Rate Bond. Past performance may or may not be sustained in the future.
Floating Rate Bonds (FRB) offer a coupon tied to a benchmark rate like MIBOR or T-Bill which
resets periodically to factor changes to the interest rate.

12. Why Floating Rate Bonds?
12
2. Mark to Market (MTM) Gain
• RBI’s stance - moving from DOVISH to HAWKISH
• We expect higher demand for Floating Rate Bonds - due to rising
interest rate cycle
• Borrowing calendar for Floating Rate Bonds - No increase

13. 13
3 . Carry over normal instruments
Why Floating Rate Bonds?
Floating rate bonds have predefined coupon reset, generally 6 months, which facilitates
better carry compared to similar 6 month tenure instruments. To illustrate, consider a 3 Year
floating rate bond priced at 6M T-Bill +1.2% spread as coupon with a 6 months reset
frequency in an rising interest rate scenario
Timeline 6M T-Bill Yields (%) Spread (%) Effective Coupon Rate (%)
Issue Date 3.50 1.20 4.70
Y1H2 3.75 1.20 4.95
Y2H1 4.00 1.20 5.20
Y2H2 4.25 1.20 5.45
Y3H1 4.50 1.20 5.70
Y3H2 4.75 1.20 5.95
T-bill: Treasury Bill. Y:Year; H:Half. The above representation is for illustration purpose and actual result may vary. Please note: The spread is a function of several factors including the credit
spread of the issuer to the outlook on interest rates and demand and supply conditions

14. Tide is turning and we are prepared!
14
Scheme Name Exposure to Natural Floating Rate Bonds
ICICI Prudential Floating Interest Fund 65.3%
ICICI Prudential Savings Fund 54.6%
ICICI Prudential Gilt Fund 50.5%
ICICI Prudential Corporate Bond Fund 41.6%
ICICI Prudential All Seasons Bond Fund 27.1%
ICICI Prudential Short Term Fund 24.6%
ICICI Prudential Banking & PSU Debt Fund 23.2%
ICICI Prudential Bond Fund 15.8%
ICICI Prudential Medium Term Bond Fund 6.9%
ICICI Prudential Credit Risk Fund 6.5%
Data as on March 31, 2022. Excludes exposure towards Synthetic floating rate bonds, fixed rate bonds, cash and net current assets.
We have increased our exposure towards floating rate bonds in most of our schemes
which bodes well in a rising interest rate cycle

15. Duration Management
15
Scheme Name
(A) (B) (C)
Change in Mod
Duration (C-B)
Mod Duration in Yrs
(Oct 31,2021)
Mod Duration in Yrs
(Feb 28,2022)
Mod Duration in Yrs
(Mar 31,2022)
ICICI Prudential Liquid Fund 0.1 0.1 0.1 0.0
ICICI Prudential Money Market Fund 0.2 0.3 0.5 0.2
ICICI Prudential Ultra Short Term Fund 0.2 0.2 0.3 0.1
ICICI Prudential Savings Fund 0.8 0.9 1.1 0.2
ICICI Prudential Floating Interest Fund 1.6 1.6 1.3 -0.3
ICICI Prudential Credit Risk Fund 1.6 1.9 1.7 -0.2
ICICI Prudential Short Term Fund 1.6 2.0 1.5 -0.5
ICICI Prudential Corporate Bond Fund 2.7 2.2 1.4 -0.8
ICICI Prudential Banking & PSU Debt Fund 3.9 3.0 2.2 -0.8
ICICI Prudential Medium Term Bond Fund 2.5 3.1 2.2 -0.9
ICICI Prudential Bond Fund 4.2 4.8 2.8 -2.0
ICICI Prudential All Seasons Bond Fund 2.3 3.4 2.3 -1.1
ICICI Prudential Long Term Bond Fund 8.3 7.6 6.9 -0.7
ICICI Prudential Gilt Fund 7 4.7 2.4 -2.3
We have managed our duration dynamically. As on Mar 31, 2022, in anticipation of increased
volatility, we have reduced duration in most of our schemes

16. Summary
16
• RBIs commentary has changed
• Effectively, the rate hike cycle has started
• We expect 100 bps Repo Rate hike in CY 2022
• Floating rate bonds is likely to outperform every other instruments in
the fixed income space

17. Scheme Risk-o-meters
17
This Product is suitable for investors who are
seeking*:
• Short term savings
• An open ended low duration debt scheme
that aims to maximize income by
investing in debt and money market
instruments while maintaining optimum
balance of yield, safety and liquidity.
Please note that the Risk-o-meter(s)
specified will be evaluated and updated on a
monthly basis. The above riskometers are as
on Mar 31, 2022. Please refer to
https://www.icicipruamc.com/news-and-
updates/all-news for more details.
ICICI Prudential Money Market Fund
An open debt scheme investing in money market instruments. A
relatively low interest rate risk and moderate credit risk.
ICICI Prudential Savings Fund
An open ended low duration debt scheme investing in instruments such that
the Macaulay duration of the portfolio is between 6 months and 12 months. A
relatively high interest rate risk and moderate credit risk.
ICICI Prudential Liquid Fund
An open ended liquid scheme. A relatively low interest rate risk and
moderate credit risk.
ICICI Prudential Overnight Fund
An open ended debt scheme investing in overnight securities. A relatively
low interest rate risk and relatively low credit risk.

18. Scheme Risk-o-meters
18
Please note that the Risk-o-
meter(s) specified will be
evaluated and updated on a
monthly basis. The above
riskometers are as on Mar 31,
2022. Please refer to
https://www.icicipruamc.com/ne
ws-and-updates/all-news for
more details.
ICICI Prudential Corporate Bond Fund
(An open ended debt scheme predominantly investing in AA+ or above rated
corporate bonds. A relatively high interest rate risk and moderate credit risk.)
ICICI Prudential Short Term Fund
(An open ended short term debt scheme investing in instruments such that the
Macaulay Duration of the portfolio is between 1 and 3 years. A relatively high
interest rate risk and moderate credit risk.)
ICICI Prudential Floating Interest Fund
(An open ended debt scheme predominantly investing in floating rate instruments
(including fixed rate instruments converted to floating rate exposures using
swaps/derivatives). A relatively high interest rate risk and moderate credit risk. )
ICICI Prudential Banking & PSU Debt Fund
(An open ended debt scheme predominantly investing in Debt instruments of banks,
Public Sector Undertakings, Public Financial Institutions and Municipal bonds. A
relatively high interest rate risk and moderate credit risk.)

19. Scheme Risk-o-meters
19
Please note that the Risk-o-meter(s) specified
will be evaluated and updated on a monthly
basis. The above riskometers are as on Mar 31,
2022. Please refer to
https://www.icicipruamc.com/news-and-
updates/all-news for more details.
ICICI Prudential Ultra Short Term Fund
An open ended ultra-short term debt scheme investing in instruments such
that the Macaulay duration of the portfolio between 3 months and 6 months.
A moderate interest rate risk and moderate credit risk.
ICICI Prudential Credit Risk Fund
(An open ended debt scheme predominantly investing in AA and below
rated corporate bonds. A relatively high interest rate risk and relatively
high credit risk. )
ICICI Prudential Credit Risk Fund
An open ended debt scheme predominantly investing in AA and below rated
corporate bonds. A relatively high interest rate risk and relatively high credit
risk.
ICICI Prudential All Seasons Bond Fund
An open ended dynamic debt scheme investing across duration. A relatively
high interest rate risk and moderate credit risk.
ICICI Prudential Medium Term Bond Fund
An open ended debt scheme investing in instruments such that the Macaulay
Duration of the portfolio is between 3 and 4 years. The Macaulay duration of
the portfolio is 1 Year to 4 years under anticipated adverse situation. A
relatively high interest rate risk and moderate credit risk.

20. Scheme Risk-o-meters
20
Please note that the Risk-o-meter(s) specified
above will be evaluated and updated on a
monthly basis. The above riskometers are as
on Mar 31, 2022. Please refer to
https://www.icicipruamc.com/news-and-
updates/all-news for more details.
ICICI Prudential Bond Fund
An open ended medium to long term debt scheme investing in instruments
such that the Macaulay duration of the portfolio is between 4 Years and 7
years. The Macaulay duration of the portfolio is 1 Year to 7 years under
anticipated adverse situation. A relatively high interest rate risk and
moderate credit risk.
ICICI Prudential Long Term Bond Fund
An open-ended debt scheme investing in instruments such that the Macaulay
duration of the portfolio is greater than 7 Years. A relatively high interest rate
risk and relatively low credit risk
ICICI Prudential Gilt Fund
An open ended debt scheme investing in government securities across
maturity. A relatively high interest rate risk and relatively low credit risk.
ICICI Prudential Constant Maturity Gilt Fund
An Open Ended debt scheme investing in government securities having a
constant maturity of 10 Years. A relatively high interest rate risk and relatively
low credit risk.

21. SR
No. Scheme Name Position in the Matrix
10 ICICI Prudential Long Term Bond Fund
11
ICICI Prudential Gilt Fund
12
ICICI Prudential Constant Maturity Gilt
Fund
13
ICICI Prudential Credit Risk Fund
14
ICICI Prudential Liquid Fund
15 ICICI Prudential Money Market Fund
16
ICICI Prudential Ultra Short Term Fund
Potential Risk Class Matrix
21
SR
No. Scheme Name Position in the Matrix
1 ICICI Prudential Overnight Fund
2 ICICI Prudential Savings Fund
3 ICICI Prudential Floating Interest Fund
4
ICICI Prudential Medium Term Bond
Fund
5 ICICI Prudential All Seasons Bond Fund
6 ICICI Prudential Corporate Bond Fund
7
ICICI Prudential Banking & PSU Debt
Fund
8 ICICI Prudential Short Term Fund
9 ICICI Prudential Bond Fund
As per SEBI Circular dated, June 07, 2021; the potential risk class (PRC) matrix based on interest rate risk and credit risk, is as below:

22. Disclaimer
22
Mutual Fund investments are subject to market risks, read all scheme related
documents carefully.
All figures and other data given in this document are dated. The same may or may not be relevant at a future date. The AMC takes no responsibility of updating any data/information in this material
from time to time. The in- formation 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. Prospective investors are advised to consult their own legal, tax and financial advisors to determine possible tax, legal
and other financial implication or consequence of subscribing to the units of ICICI Prudential Mutual Fund. Data source: Bloomberg, except as mentioned specifically.
Disclaimer: In the preparation of the material contained in this document, ICICI Prudential Asset Management Company Ltd. (the AMC) has used information that is publicly available, including
information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the AMC and/or its affiliates and which may have been made
available to the AMC and/or to its affiliates. Information gathered and material used in this document is believed to be from reliable sources. The AMC however does not warrant the accuracy,
reasonableness and / or completeness of any information. We have included statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”,
“should”, “believe” and similar expressions or variations of such expressions, that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking
statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other
countries globally, which have an impact on our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign
exchange rates, equity prices or other rates or prices etc. ICICI Prudential Asset Management Company Limited (including its affiliates), the Mutual Fund, The Trust and any of its officers, directors,
personnel and employees, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any
way arising from the use of this material in any manner. Further, the information contained herein should not be construed as forecast or promise. The recipient alone shall be fully responsible/are
liable for any decision taken on this material
Note: Macaulay duration is the weighted average term to maturity of the cash flows from the bond. The weight of each cash flow is determined by dividing the present value of the cash flow by the
price.