Living costs on the other hand are getting higher because of the rising inflation which acts as a frictional force in the individuals attempt to realize his goals.
We have various investment options available today ranging from fixed deposits, mutual funds, stocks, shares, etc. But now when some of these projects are near completion and are ready to be monetized, valuations in infra sector are getting corrected and appear attractive and government has increased infrastructure spends drastically; it seems like the right time to invest in infrastructure funds and benefit from growth the sector promises. The projects which are near completion will start functioning and will probably move towards becoming higher yielding assets.
Though there is some skepticism in the markets about the infrastructure because these funds have not performed very well in the last few years. People now realize that their savings will not be enough to keep pace with rising inflation and are therefore seeking different investment avenues which help them grow their money. All this was further aggravated with the challenges that long term projects face - timely availability of cheap capital, execution delays, material availability and policy risks.
Infrastructure sector has a good chance to see return of profitability in 2012, with sizeable reduction in balance sheet/debt by all companies operating in this space.
. Higher education, availability of multiple career options has led to rising income levels and rising aspirations and an increased focus on planning for the present and the future.
This means that they are generally managed and financed on a long-term basis and thus give steady returns in the long-term.
Other factors which make the growth in this sector as significant as ever are the new initiatives the government has taken in the area of public- private partnerships. Rising income levels leading to consumption demand is fueling demand for products and services and infrastructure needs are increasing very rapidly with increasing consumption demand For eg, next year India will see a new car sold every 2 secs, leading to a high demand for roads, highways and bridges. If we take roads, we have one of the largest private public partnership programmes in the world. Airports, Metros etc are all assets that have been tendered out to the private sector. That’s probably because the theme was overplayed; the valuations went high making the stocks expensive leading to poor returns.
With all this growth there is a huge need for infrastructure in the country.Today people are more focused on improving their lifestyle and achieving their goals.
Infrastructure assets generally have high development costs and long asset life.
In India, infrastructure as an investment destination has been making quite a buzz over the past few years.
Some companies underperformed, some did well but at the cost of the profitability very few companies could match the balance sheet build up with commensurate profits. India is the second most populous nation and among the world’s fastest growing economies. of these mutual funds are gaining more momentum and popularity because of their ability to generate long term wealth and the inability of common people to devote the time and effort that investment research demands.
This presents the investor with a great opportunity to benefit from investing in this sector with huge growth and profit potential. All this coupled with the attractive valuations at which the companies in the sector are available, makes it a great time to invest in infrastructure funds. This demand for infrastructure can lead to a virtuous cycle of growth and economic momentum. Investment in ports by the private sector is dotting the coastline and a private port in the Cannabis Packaging
next couple of years with is amongst the top two in the country.>>