IDFC Project Equity to invest 60% in road & power sector

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » Nifty BSE | NSE 30/05/12 Are Mutual Funds betting on Nifty?

Q: Does the situation look much better now we have seen some kind of risk appetite reenter the equity markets and we have seen this dramatic fall in the corporate bond market and the CD markets. Do you see this is a very good time for infrastructure projects to start, if they were mothballed to rethink, if they were being pushed back to come and access the market, are you seeing that fervor of accessing the market at all?
A: My view is that nothing fundamentally changed in the infrastructure opportunity per se. The sentiments did have an impact - in the sense public market had corrected so infrastructure developers all of a sudden found one pool of equity capital that was from the Initial public offering (IPO) market shut for them. However given the fundamental attractiveness of the infrastructure sector in India - India on a relative basis will continue to be the second fastest growing economy in the world and has potential to generate equity returns, which are fairly attractive for equity investors across the globe. Given the regulatory framework and the legal framework in India, which gives global investors a lot of comfort in the inherent robustness of the soft infrastructure- as in enabling the infrastructure to facilitate private capital investments. We think that fundamentally infrastructure is going to be an attractive opportunity, the public market correction did have an impact - in a sense it did slow down the public equity into infrastructure. But fundamentally I don't think from a private equity standpoint anything fundamentally changed. 
The only thing that one could say about private equity investments into infrastructure is that, it became even more attractive because valuations have been correcting over the past 6-8 months.
Q: Which is the angle or which is the sub-sect of infrastructure projects that might receive interest, will it be roads, will it be power, will it be something else?
A: Fundamentally, the two sectors that have the maximum opportunity are the power generation sector and the road sector. From our perspective about 60% of our investment will go to these two sectors. There are of course other sectors like telecom and urban infrastructure, education and healthcare where we could deploy capital, but the two key sectors are roads and power generation.