Asia Index, a BSE and S&P Dow Jones Indices joint venture, today launched an index to measure the performance of 30 leading infrastructure companies ahead of an anticipated investment boom in the sector as the government kick-starts stalled projects.
The new index consists of companies from five sectors - energy, transportation, non-banking financial institutions, telecommunications and utilities.
The 'S&P BSE India Infrastructure Index' includes IDFC, Bharti Airtel, Power Finance Corp, Rural Electrification Corp, NTPC, Power Grid Corp of India, Adani Ports and Special Economic Zone, Bharti Infratel, Idea Cellular and Reliance Communications, the top 10 firms on the new index.
A key highlight of the index is the inclusion of stocks from non-banking financial institutions, which are either categorised as an 'Infrastructure Finance Company' by the RBI or get major revenue from infrastructure finance. The firms would be drawn from the S&P BSE 500 index.
According to Asia Index, the 30-stock index is designed to serve as both a benchmark and an investable index.
"Investors in India increasingly want an infrastructure index that is not only transparent and diversified but also includes non-banking financial institutions that earn revenue from infrastructure financing," Asia Index CEO Alka Banerjee said in a statement.
"This, combined with India's imminent announcement on its blueprint for infrastructure development, potentially means that interest in infrastructure could remain strong among Indian investors for the next several years," Banerjee added.
Expectations of the new government kick-starting stalled projects and large investments in the sector would fuel demand for infrastructure funds and a "clean transparent index will provide the right tool to measure how much of the investment in the infrastructure will translate in to stock price growth of these companies," Asia Index said.
"We already see a big boom in infrastructure funds and an accurate index is needed to measure their performance," it added.
Stocks in the index must have a minimum average three-month daily traded value of Rs 10 million.
The maximum weightage under the new index is that of utilities at 30.28 per cent.
This is the third index launched by Asia Index after the Shariah Index and the S&P BSE India 10 year Sovereign Bond Index.
