Mumbai: SBI Funds Management Pvt. Ltd said on 10 May it would launch a three-year, closed-end equity fund to invest in companies likely to benefit from India’s rising expenditure on infrastructure.
Three of India’s top five performing funds in 2006 were pure infrastructure funds and have attracted attention of investors and fund houses.
“If you look at all the 2,600 stocks that are traded today, you will find the infrastructure theme to be the most powerful,” said Sanjay Sinha, head of equities, SBI Mutual Fund, explaining the launch of SBI Infrastructure Fund Series I.
A mid-April Reuters poll of 13 fund houses found equity funds invested more than a quarter of their assets in sectors such as basic engineering, construction and financial services.
The scheme will look to opportunities likely from India’s proposed Rs14 lakh crore investment on infrastructure in the 11th five-year plan, Sinha said. “What we have spent in the 50 years of planned development is nothing as compared to what we now plan to spent.”
The fund, open for subscription from 11 May to 8 June, would invest at least 65% of assets in equities and the rest in debt and money market instruments, the asset manager said.
The fund house managed assets worth about Rs18,300 crore at the end of April, data from Association of Mutual Funds in India showed.