MFs await Sebi rules to launch infra funds

MUMBAI: 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.

"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 Chairman and Member of the Sebi Advisory Committee on Mutual Funds, said, A P Kurian here today.

Finance Minister P Chidambaram in his Budget proposals had permitted mutual funds to launch and operate dedicated infrastructure funds, to promote the flow of investment to the infrastructure sector.

"These will be close ended long term fund with lock in period of 5 to 6 years and will invest in infrastructure projects like airport modernisation that didn't have securities listed in the market but special purpose vehicles," Kurian said.

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."

Association of Mutual Funds in India (AMFI) had made a suggestion to introduce such type of funds in the interest of both the needs of the infrastructure development and for good returns for the mutual fund investors, Kurian said.