MFs await SEBI guidelines for launching infrastructure funds

Mutual funds await necessary guidelines from market regulator SEBI to launch dedicated infrastructure fund which was announced in the budget to boost the sector that requires $320 billion funding in the next five years.

A P Kurien, chairman, Association of mutual Funds of India and member of the SEBI advisory committee on mutual funds, told reporters "SEBI will have to work out details and bring necessary guidelines with regard to dedicated infrastructure fund such as the types of fund, disclosures, limits to enable the mutual funds to go ahead with such funds."

AMFI had suggested the introduction of such types of funds to mobilise resources for infrastructure development.

In his budget proposals the finance minister had permitted mutual funds to launch and operate dedicated infrastructure funds, to promote the flow of investment to the infrastructure sector.

These funds, Kurien said, would be close-ended long-term funds with a lock in period of five to six years and would invest in infrastructure projects like airport modernisation that didn't have securities listed in the market but special purpose vehicles.

Ajay Bagga, CEO of Lotus India asset management company said, "this will be long term funds that will provide infrastructure funding to the country and also investors a long-term growth oriented tax efficient investment option."