Infrastructure and realty sectors are back on the radar of mutual fund houses. In the first five months of the current calendar, they have significantly increased their exposure to stocks in these sectors.
Some fund houses are launching new schemes as well. Reliance Capital Asset Management has recently launched an open-ended infrastructure fund. Even Tata Mutual Fund has applied to the Securities and Exchange Board of India (Sebi) to launch a small-and mid-cap infrastructure fund.
| INCREASING EXPOSURE | ||
| Name of company in which fund houses increased holding | No of shares in January | No of shares in May |
| GVK Power & Infrastructure | 4.2 crore | 8.8 crore |
| Unitech | 12 lakh | 3.3 crore |
| Suzlon Energy | 1.6 crore | 4.6 crore |
| Indiabulls Real Estate | 32,000 | 1.7 crore |
| IRB Infrastructure and Developers | 52 lakh | 1.7 crore |
| NTPC | 2.8 crore | 3.9 crore |
| DLF | 7 lakh | 61 lakh |
| GMR Infrastructure | 65 lakh | 1.1 crore |
| Reliance Power | 26 lakh | 52 lakh |
| Ultratech Cement | 2.9 lakh | 6 lakh |
| Source: Value Research | ||
In terms of number of shares, the total exposure of mutual funds to Indiabulls Real Estate has increased from 32,000 to 1.7 crore during the period under review. Similarly, their holdings in DLF and Unitech have increased from 7.7 lakh to 61 lakh and 13 lakh to 3.3 crore shares, respectively. These fund houses’ holdings in GMR Infrastructure have also increased from 65 lakh to 1.1 crore shares.
Mahesh Patil, co-head, equity, Birla SunLife Mutual Fund, said: “At present, the infrastructure sector accounts for only 4 per cent of our gross domestic product (GDP), while it accounts for 10 per cent of China’s GDP. There is a wide gap that needs to be bridged in the next five-ten years.”
Market players are also enthused by the fact that a stable government at the Centre is likely to focus aggressively on infrastructure development. Along with increased spending by the government, there are expectations of high foreign inflows as well.
There could be more projects through public-private partnerships, which would help these companies’ balance sheets. Also, the worse for these sectors could be over due to easing of liquidity conditions.
Power stocks have also seen some keen interest from fund managers. GVK Power & Infrastructure, Suzlon and NTPC are some of the stocks where aggressive buying was witnessed. Market experts said that this sector was going to get a big boost because of the high demand in semi-rural and rural areas.