Friday, 22 February 2008

Eight Indian funds in world's top-10 infrastructure list

Eight Indian funds in world's top-10 infrastructure list

MUMBAI: Eight Indian equity funds featured in the world's top 10 infrastructure funds in 2007, helped by local shares recording their best gains in four years, data from fund tracker Lipper showed. Five of them, led by ICICI Prudential Infrastructure Fund, grabbed the top five ranks in the world among 58 such funds tracked by Lipper globally.

The Indian funds rose an average 79.9 per cent, outperforming their global peers that showed an average return of 18.7 per cent. "Infrastructure was one of the dominant themes of 2007 in India, because of which local funds outperformed the general market and were also able to beat their global peers," Dhruva Raj Chatterji, research analyst with Lipper, said.

Infrastructure funds were the best performers among Indian funds for two years in a row, with four of the top 10 funds notching gains of 90 percent in 2007, compared with a 55 percent plus jump by six of the top 10 in 2006.

The main BSE index rose 47 per cent in 2007. Investors are betting on an estimated $500 billion investment expected over the next four to five years to strengthen the country's transport and power backbone, triggering a spurt in infrastructure fund launches.

At least nine of India's 33 fund firms offered infrastructure related equity funds in 2007 and two so far this year, taking the total number of such funds to about 18 in the Rs 5.5 trillion fund industry, data from fund tracker ICRA showed.

However, recent gains have boosted valuations, Chatterji said, although the Indian Infrastructure theme is expected to continue to garner interest. Shares in Larsen & Toubro Ltd and power equipment maker Bharat Heavy Electricals Ltd rose about 189 per cent and 125 per cent respectively last year as compared with the 47 percent gain of India's benchmark index.

But the two stocks, even after dipping between 17 per cent and 19 per cent this year in a widespread market rout, still trade at 48 and 32 times their forecast earnings, far higher than the main index's 17.5, as reported by the media.

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