Investing infrastructure fund capex

Infrastructure mutual fund

From WebNotes, a public knowledge base. Last updated 18 May 2026. Reading time ~6 min.

An Infrastructure mutual fund is a thematic equity scheme that invests at least 80 per cent of its corpus in infrastructure, capital goods, construction, engineering, and related companies. The category sits within the SEBI sectoral and thematic framework. Infrastructure funds capture the Indian capex cycle through equity exposure to companies benefiting from government and private infrastructure spending.

For Indian retail investors, infrastructure mutual funds offer:

Capex-cycle exposure: Riding the Indian capex revival.
Government spending plays: Beneficiaries of infrastructure budget allocations.
Sector diversification: Construction + capital goods + engineering + transportation.
Cyclical alpha potential: Strong returns during capex upcycles.

Major infrastructure funds

HDFC Infrastructure Fund.
ICICI Prudential Infrastructure Fund.
SBI Infrastructure Fund.
DSP T.I.G.E.R. Fund: The Infrastructure Growth and Economic Reforms fund.
Aditya Birla Sun Life Infrastructure Fund.
Tata Infrastructure Fund.
Franklin Build India Fund.
Bandhan Infrastructure Fund.

Investment universe

Infrastructure funds invest across:

Engineering and capital goods: L&T, Siemens, ABB, Cummins, Thermax.
Construction: Capital construction, BHEL, Bharat Heavy Electricals.
Cement: UltraTech, Ambuja, ACC, Shree Cement, Dalmia Bharat.
Steel and metals: Tata Steel, JSW Steel, Hindalco, JSPL.
Transportation infrastructure: GMR Airports Infrastructure, Adani Ports, Container Corp.
Power: NTPC, Power Grid, Tata Power, Adani Green Energy.
Oil and gas infrastructure: GAIL, Petronet LNG, Indraprastha Gas.
Defence: HAL, BEL, Bharat Dynamics (sometimes included).

Capex-cycle positioning

Indian capex spending trajectories drive infrastructure fund performance:

Government capex: Budget allocations to roads, railways, power, defence.
Private capex: Industrial investment cycle.
PLI scheme tailwinds: Production-Linked Incentive driven capex.
Real estate construction: Residential and commercial construction.

The 2023-2024 period has seen particularly strong infrastructure fund performance reflecting the Indian capex cycle revival.

Tax treatment

Infrastructure mutual funds are equity-oriented :

LTCG (>12 months): 12.5 per cent above Rs 1.25 lakh annual exemption under Section 112A .
STCG (≤12 months): 20 per cent under Section 111A .

Risks

Cyclical risk: Capex cycles can reverse sharply.
Government policy risk: Spending cuts affecting beneficiaries.
Sectoral concentration: Heavy industrials/capital goods exposure.
Execution risk: Infrastructure project delays.

Role in portfolios

Infrastructure funds suit:

Capex-cycle tactical positioning: 5-10 per cent allocation during upcycle.
Long-term economic-growth play: Indian infrastructure investment story.
Cyclical satellite holding: Within diversified equity portfolio.

Typical allocation: 5-10 per cent of equity portfolio for tactical capex exposure.

External references

References

SEBI October 2017 categorisation circular.
SEBI (Mutual Funds) Regulations 1996.
AMFI scheme data on infrastructure funds.

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WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 18 May 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.