Skip to main content

IDFC Infrastructure Fund - Invest Now Online

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

IDFC Infrastructure Fund
 

The portfolio is built around execution and capital efficiency. We do not prefer leveraged balance sheets. The macro environment is consolidating as the focus is on 'capital productivity' rather than 'large capex'. We continue to believe that the businesses which have lower leverage and execution track-record would go on to consolidate their respective space (whether asset owners or service/ancillary businesses). Such businesses would be able to aggregate profitable opportunities going into the next cycle by being able to absorb capital (whether equity or leverage).

 

Specific provisions of twin budgets (fiscal and railways)

The Union Budget 2014-15 was presented on 10th July 2014 by the Indian FM, while Railway budget was presented on 08th July 2014. Here's a list of specific points relevant to infrastructure sector (including railways) and their implications. 

(a) The budget primarily seeks to increase the pool of capital available to the infrastructure sector by reducing financing costs and efficient taxation, thereby encouraging capital flow from banks and FDI and release capital from stressed assets. The relevant points are listed out as below -

-          Banks will be permitted to raise long term funds for lending to infrastructure sector with minimum regulatory pre-emption such as CRR, SLR and Priority Sector Lending (PSL). However the specifics would be known only once RBI formalizes the operational aspects.

-          Investment Trusts for infrastructure to get tax pass-through benefit similar to Real Estate Investment Trusts (REITs). This shall help monetization of existing investments and raise resources for new assets

-          Capex threshold reduced to Rs 250 mn from Rs 1 bn earlier for availing additional investment allowance (higher depreciation rate of 15%)

-          Tax on dividend from foreign subsidiaries continued at 15%.

-          FDI cap in defense raised to 49% from 26% through FIPB route

-          Proposed a complete "overhaul" of subsidy regime. However, no concrete steps/ timelines for subsidy reduction were announced.

-          Extension of section 80IA benefit for upto 3 years. The 10 year tax holiday has been extended to the undertakings which begin generation, distribution and transmission of power by Mar-17.

-          Six new Debt Recovery Tribunals to be set up.

-          To give necessary impetus to the manufacturing sector, the eBiz platform aims to make all business and investment related clearances and compliances available on a 24x7 single portal.

 

Real Estate

-          Necessary incentives and a conducive tax regime for REITs shall be provided

-          Minimum area for FDI in real estate lowered (from 50,000 sq. mtrs. to 20,000 sq. mtrs.) and so also capital requirements (from $10 mn to $5 mn)

-          Tax incentives on home loans increased (higher limits under Sec 24b and 80C)

 

Railway budget

-          Recent tariff hike announced last month to provide additional revenue of Rs 80 bn

-          Indian railways to explore alternative funding resources through investible surplus funds of railway PSUs

-          Seeking cabinet approval for FDI in railways (except in railways operations)

(b) Further, budgetary allocations have been increased in certain key sectors for new infrastructure creation. The relevant points are listed out as below -

-          Allocation for Defence spend raised to Rs2290bn (+12% yoy) 

-          Allocation of Rs378bn for NHAI and support to state highway projects, target of constructing 8500km of national highways and allocation for Rs5bn for project preparation for expressways

-          Allocation of Rs 116 bn to set up 16 new ports

-          Allocation for Railways increased to Rs 477bn

-          Municipal Debt Facility raised to Rs 500 bn from Rs 50bn earlier over five years for public transport, solid waste disposal, sewerage treatment and drinking water in the urban areas

-          Seek to strengthen connectivity of gas network in India, 15,000 kms of new pipelines to be constructed which will likely lead to an investment of ~Rs600bn

-          Allocation of Rs. 7,060 cr for the project of developing '100 smart cities'

-          Allocation for Rs. 2,037 cr for Integrated Ganga Conservation Mission "NAMAMI GANGE"

 

Real Estate

-          Allocation for NHB (National Housing Bank) increased to Rs. 8,000 crore to support Rural housing.

 

Railway budget

-          Planned capex of Rs 645 bn in FY15 vs. Rs 582 bn

-          Plans to award new lines for linking 7 ports under PPP mode

-          Dedicated Freight Corridor to award 1,000 kms of civil construction works at a cost of Rs 200 mn/km in FY15

 

Other key schemes in fiscal budget

-          Pradhan mantri krishi sinchayee yojana to promote access to irrigation

-          SP Mukherji Rurban mission to deliver integrated project based infrastructure in the rural areas

-          Deendayal Upadhyaya Gram Jyoti Yojana for feeder separation will be launched to augment power supply to the rural areas and for strengthening sub-transmission and distribution systems

-          A National Industrial Corridor Authority, with its headquarters in Pune, is being set up to coordinate the development of the industrial corridors.

-          Special Economic Zones (SEZs) to be revived

-          Scheme for development of new airports in Tier I and Tier II Cities to be launched

-          Ultra-Modern Super Critical Coal Based Thermal Power Technology to be explored

-          Ultra Mega Solar Power Projects proposed in 4 states

Our View

As outlined above the twin budgets (fiscal and railways) 2014-15 underscore two important aspects:

(1) Immediate focus on execution – increase flow of capital, reduce financing costs, free-up capital from stressed assets, encourage private participation through REITs/liberal FDI policies and address bank funding issues through SLR/CRR relaxation, further accompanied by smooth execution through a hassle-free administrative and legislative structure.

(2) Capacity building for long term infra creation – undertake structural reforms and build capacity, as evident from multiple schemes undertaken (outlined above) and setting aside money for numerous studies or preparatory work for big projects expected to be announced later during NDA tenure.  

The new government seems to be embarking on a 'capital productivity cycle' before it would want to accelerate the 'capex cycle', as the economy continues to be in a transition mode where 'stalled projects' have hit a peak while 'new project announcements' have hit a trough. The key beneficiaries would be the balance sheets that can absorb flow of capital, deliver on execution, complete projects and consolidate in the environment.

Accordingly, there is no structural change in portfolio stance, as the unfolding of macro environment and budgetary aspects are consistent with our stance.

Portfolio

The IDFC Infra portfolio is built to monetize the infrastructure opportunity in the country. We expect that companies with a dominant market share and higher visibility of cash flows would consolidate the space going forward. The current portfolio represents our version of the companies which will dominate- the Power segment, the Telecom industry, the Energy and Infrastructure businesses.

 

Equity holdings as on 30th Jun 2014

Company

Industry

(%) NAV

Larsen & Toubro Ltd

Construction Project

20.55%

Bharti Airtel Ltd

Telecom - Services

9.47%

Power Grid Corporation of India Ltd

Power

6.85%

Container Corporation of India Ltd

Transportation

5.35%

Siemens Ltd

Industrial Capital Goods

5.10%

Engineers India Ltd

Construction Project

4.57%

JSW Energy Ltd

Power

4.44%

Cummins India Ltd

Industrial Products

4.13%

Mangalore Refinery and Petrochemicals Ltd

Petroleum Products

4.11%

Adani Ports and Special Economic Zone Ltd

Transportation

4.05%

Tata Power Company Ltd

Power

3.69%

Bharti Infratel Limited

Telecom -  Equipment & Accessories

3.58%

Ultratech Cement Ltd

Cement

2.99%

Idea Cellular Ltd

Telecom - Services

2.80%

PTC India Ltd

Power

2.55%

CESC Ltd

Power

2.39%

KSK Energy Ventures Ltd

Power

2.09%

Gujarat State Petronet Ltd

Gas

1.93%

Reliance Industries Ltd

Petroleum Products

1.88%

Alstom India Ltd

Industrial Capital Goods

1.37%

Indian Oil Corporation Ltd

Petroleum Products

1.28%

 

Sector Allocation

Product Label:

Disclaimer:

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
      2. Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

Perpetual SIP - Its Advantages

Retail investors have taken a fancy to investing in mutual funds through systematic investment plans (SIPs). As per industry estimates, Rs 4,000 crore flows into SIPs every month. One way to take advantage of SIPs in a true long-term manner is to opt for a perpetual SIP 1. What is a perpetual SIP? In an SIP , you make periodic investments in a mutual fund scheme of your choice generally every month for a pre defined tenure. While signing up an SIP mandate , you have the option to leave the end-date column blank. If the column is blank, it means the investor has opted for a perpetual SIP . Most fund houses assume this SIP will continue till December 2099 unless you give a written communication to stop it. However, some fund houses require you to tick the `perpetual option'. 2. What are the advantages of perpetual SIPs? Registering an SIP involves a lot of paperwork and it takes time. It is observed that many investors skip their SIP instalments when they go for short-tenure option...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now