IDFC plans India’s first infrastructure debt fund through mutual fund route

IDFC infrastructure debt fund shall have a minimum tenor of five years and not greater than 15 years from the date of allotment of units. 

IDFC plans to launch India’s first infrastructure debt fund through MF route and has filed an offer document with SEBI.

The framework for establishment of Infrastructure Debt Funds (IDFs) was announced by the Finance Minister in the Union budget 2011, wherein IDFs were allowed to be set up either structured as an NBFC or as a mutual fund. IDFC MF has done the filing with SEBI through the MF route. IDFs are a novel attempt to address the issue of sourcing long term debt for infrastructure projects.  

IDFC infrastructure debt fund   shall have a minimum tenor of five years and not greater than 15 years from the date of allotment of units.  The investment objective of the scheme is to seek to generate income and capital appreciation by investing primarily in a portfolio of infrastructure debt instruments. The corpus under the IDF will be invested in debt securities, bank loan and securitized debt instruments.

Dr Rajiv Lall, MD & CEO, IDFC said “Investors are looking at fixed income products which can offer superior returns IDF would offer investors a debt product with superior return. Through the IDF, we would be able to create an instrument which allows capital markets to invest in Infrastructure debt, thereby freeing balance sheets of banks and allowing intermediation of funds in the infrastructure sector.

“People are looking for products that offer superior returns, without volatility associated with equity markets.  Infra debt which is very different from volatile infra equity has ability to offer superior return with safety. Large number of HNIs would be potential investor in a debt fund. IDF would offer stable returns for long term making it better product than fixed deposits,” he added.


Market on a firm uptrend: Tuesday Closing Report

The Nifty’s next move is to 5,495 and then to 5,610

Sustained buying by institutional investors and a positive global trend led the market higher for the third successive day. This was also the third successive day that the Nifty made a higher high and higher low. We may now see the benchmark reaching the level of 5,495 and further to 5,610. The National Stock Exchange (NSE) saw a much higher volume of 80.09 crore shares, underlining bullishness.  

Extending its gains for the third day, the market opened on a firm note on positive cues from its Asian peers. The US markets closed flat ahead of the Federal Open Market Committee (FOMC) meeting, which is expected to announce its monetary policy decision later today. Back home, the Nifty opened at 5391, up 31 points over its previous close, and the Sensex gained 92 points to resume trade at 17680. The opening figures on both benchmarks were their intraday lows.

Across-the-board buying since the start of the session saw all sectoral gauged in the green in early trade. The market traded sideways in the positive for the entire session with the indices hitting their intraday highs in post-noon trade. At the highs, the Nifty touched 5,439 and the Sensex scaled 17,843.

The RBI’s move to boost liquidity through the CRR cut last week helped rate-sensitive sectors like metals, oil & gas, realty and power log good gains. The market finally closed near the highs of the day. The Nifty settled 70 points higher at 5,430 and the Sensex surged 226 points to end trade at 17,814.

The advance-decline ratio on the NSE was positive at 1203:590.

Among the broader indices, the BSE Mid-cap index gained 1.21% and the BSE Small-cap index rose 1.03%.

All sectoral indices settled higher today led by BSE Metal (up 3.01%). It was followed by BSE Oil & Gas (up 2.60%); BSE Realty (up 2.11%); BSE Power (up 1.52%) and BSE Capital Goods (up 1.51%).

Sterlite Industries (up 5.06%); GAIL India (up 4.50%); Jindal Steel (up 3.80%); ONGC (up 3.42%) and Reliance Industries (up 2.72%) were the top gainers on the Sensex. The major losers were Wipro (down 1.29%); Mahindra & Mahindra (down 1%); Bajaj Auto (down 0.43%); Tata Motors (down 0.21%) and ICICI Bank (down 0.01%).

The top performers on the Nifty were Sterlite Ind (up 5.18%); Sesa Goa (up 5.16%); SAIL (up 5.03%); GAIL India (up 4.53%) and Jaiprakash Associates (up 4.39%). The main laggards were Wipro (down 1.66%); M&M, Reliance Infrastructure (down 0.93% each); Tata Motors (down 0.49%) and HCL Technologies (down 0.07%).

Asian markets settled mostly higher on hopes that European policymakers will finalise a second bailout for Greece. Besides, likelihood of the US Fed keeping interest rates unchanged also supported investor sentiment.

 The Hang Seng climbed 0.97%; the Jakarta Composite rose 0.53%; the Nikkei 225 added 0.09%; the Straits Times gained 0.91%; the Seoul Composite advanced 1.13% and the Taiwan Weighted surged 1.31%. Bucking the trend, the Shanghai Composite lost 0.19% and the KLSE Composite settled 0.05% lower. At the time of writing, the key European markets were up between 0.77% and 1.11% on positive economic news from Germany. At the same time, the US stock futures were in the green, ahead of the Fed announcement.

Back home, institutional investors—both foreign and domestic—were net buyers in the equities segment on Monday. While foreign institutional investors invested Rs1,298.64 crore in stocks, domestic institutional investors pumped in Rs203.32 crore in shares.

IT major Infosys has signed a multi-year, multi-million dollar contract with pharma major GlaxoSmithKline to optimize digital channels across its global consumer healthcare and pharmaceuticals business lines. The partnership will simplify and improve effectiveness of how GSK delivers digital content online, it said on Tuesday. Infosys gained 1.51% to close at Rs2,860.05 on the NSE.

Tata group's retail arm Trent today said its board has approved a proposal to raise up to Rs250 crore through placement of shares with institutional investors. The company's board has decided to open a QIP (Qualified Institutional Placement) issue of Rs225 crore with an option of hiking the size up to Rs 250 crore in aggregate, by way of issue of equity shares, Trent said in a filing to the BSE. The stock closed 1.895 higher at Rs924 on the NSE.

Compucom Software has been awarded an ICT project by Bihar State Educational Infrastructure Development Corporation (BSEIDC), valued at Rs46.71 crore. The project is for providing computer education on BOOT basis in 336 government schools in the state. With this order, the company now has 6,418 government schools under its umbrella across north India. The stock closed at Rs12.30 on the NSE, down 1.20% over its previous close.


Fare hike in Rail Budget looks remote

While railway minister Dinesh Trivedi is not likely to tinker with second class fares in his maiden budget, there is speculation that the budget could bring in a safety cess following the recommendation of the Kakodkar Committee on issues relating to safety

New Delhi: The Rail Budget to be presented on Wednesday may continue with the practice of not raising the fares and freight rates but the possibility of imposition of a safety cess may not be ruled out, at least on the higher class fares, reports PTI.
As Trinamool Congress leader and railway minister Dinesh Trivedi rises to present his maiden budget, he is expected to carry on with the practice of not tinkering with the second class fares like his predecessors, including TMC member and West Bengal chief minister Mamata Banerjee, over most part of the last decade.

There is speculation that the budget could bring in a safety cess following a recommendation by the Kakodkar Committee report which went into issues relating to safety over the huge railway network.

The committee had suggested a cess to realise money to the tune of Rs5,000 crore, to fund projects especially for safety upgradation of signalling and telecommunication systems.

As he does the tight ropewalk, Mr Trivedi may also introduce a mechanism to provide cushion for meeting costs on account of any spike in fuel prices. There is a suggestion for introducing a fuel adjustment component (FAC) in the basic fare to insulate railways from fuel price hike.

While the thrust of the budget would be on upgradation of infrastructure on 19,000 km of trunk route, Mr Trivedi could announce introduction of ‘train sets’ for the busy Delhi-Mumbai corridor to reduce travel time.

A train set comprises single rake with locomotive and coaches attached together. The venture may take more than four years to fructify but the budget announcement will set the ball rolling.

The budget is expected to have a proposal for introducing a bullet train for Rajasthan on the Delhi-Jaipur-Jodhpur corridor. This corridor could be linked to the proposed Pune-Ahmedabad high-speed corridor.

Unlike previous years, less number of new passenger trains could be announced.

Mr Trivedi could announce some measures to improve passenger amenities including the catering service in trains and stations and proposals for manufacture of ‘green’ toilets to improve on the current system.

The railway minister is likely to unveil an action plan for upgradation of signalling and telecommunication system to prevent accidents. Installation of train protection warning system (TPWS) and in-cab signalling system are likely to be announced in the Rail Budget 2012-13.

The budget will focus on manufacturing of modern LHB coaches as the Railways intends to replace all conventional coaches in all types of trains.

There will also be proposals for manufacturing of high horse power (5500 HP) locomotives in the next fiscal.

The Railways freight loading target of 993 million tonnes in the current financial year is unlikely to be met, according to available indications. Till February, the national transporter has carried 875.60 MT.


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