In the Union Budget of 2025-2026, the government allocated ₹11.21 lakh crore to the infrastructure sector, aligning with its goal to boost infrastructure development. Over the past few years, India's infrastructure has seen significant growth, making it a favourable investment sector for many.
However, knowing which companies to invest in, when to enter, and when to exit can be challenging. Investing in the best infrastructure mutual funds can help in this case. Read on as we explore what an infrastructure mutual fund is, who should invest in them, and how they are taxed.
Infrastructure mutual funds are sectoral funds that invest in equity and debt instruments of companies in the infrastructure sector.
The infrastructure sector comprises businesses involved in the development of roads, bridges, and other infrastructure, as well as power and utilities.
The primary goal of an infrastructure fund is to provide investors with exposure to the growth of the infrastructure sector. By investing in assets that benefit from the potential growth in the infrastructure sector, these funds aim to generate long-term capital appreciation.
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| Fund Name | Category | Risk | NAV | Expense Ratio | 1Y Returns | 3Y Returns | 5Y Returns | 7Y Returns | 10Y Returns | Rating | Fund Size (in Cr) | Exit Load |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
ICICI Prudential Infrastructure Direct-Growth | Equity | Very High | 215.84 | 1.23 | 3.9% | 23.8% | 25.1% | 22.0% | 19.2% | 5 | ₹8,311 | Exit load of 1% if redeemed within 15 days |
Nippon India Power & Infra Fund | Equity | Very High | 413.04 | 1.15 | 12.0% | 27.6% | 24.9% | 22.1% | 19.3% | 3 | ₹7,707 | Exit load of 1% if redeemed within 1 month. |
LIC MF Infrastructure Fund | Equity | Very High | 60.71 | 1.58 | 11.7% | 29.9% | 25.5% | 21.7% | 18.8% | 4 | ₹1,046 | Exit Load for units in excess of 12% of the investment,1% will be charged for redemption within 90 days. See more |
Quant Infrastructure Fund | Equity | Very High | 43.80 | 4.03 | 8.4% | 21.7% | 21.3% | 25.7% | 21.4% | 2 | ₹3,072 | Exit load of 0.50% if redeemed within 3 months. |
Franklin Build India Fund | Equity | Very High | 167.36 | 1.04 | 5.7% | 25.7% | 23.2% | 20.4% | 19.2% | 5 | ₹3,213 | Exit load of 1% if redeemed within 1 year |
DSP India T.I.G.E.R. (The Infrastructure Growth and Economic Reforms Fund | Equity | Very High | 385.89 | 1.89 | 16.9% | 28.2% | 25.5% | 22.3% | 19.7% | 4 | ₹5,788 | Exit load of 1% if redeemed less than 12 months |
Invesco India Infrastructure Fund | Equity | Very High | 80.62 | 1.57 | 7.9% | 26.2% | 23.1% | 23.7% | 20.3% | 3 | ₹1,456 | Exit load for units in excess of 10% of the investment, 1% will be charged for redemption within 1 year. See more |
SBI Infrastructure Fund | Equity | Very High | 55.18 | 1.03 | 3.7% | 21.0% | 20.4% | 19.6% | 16.9% | 3 | ₹4,804 | Exit load of 0.50% if redeemed within 30 days. |
Bank of India Manufacturing & Infrastructure Fund | Equity | Very High | 74.84 | 0.98 | 18.9% | 27.2% | 23.4% | 24.2% | 20.3% | 4 | ₹755 | Exit Load for units in excess of 10% of the investment,1% will be charged for redemption within 1 year. See more |
HDFC Infrastructure Fund | Equity | Very High | 51.93 | 1.56 | -0.0% | 24.4% | 23.1% | 16.8% | 13.8% | 3 | ₹2,416 | Exit load of 1%, if redeemed within 30 days. |
Kotak Infrastructure and Economic Reform Fund | Equity | Very High | 78.86 | 0.72 | 4.9% | 19.7% | 22.6% | 20.3% | 17.6% | 3 | ₹2,373 | 0.5% for redemption within 90 Days |
Canara Robeco Infrastructure Direct-Growth | Equity | Very High | 192.30 | 1.14 | 10.1% | 26.3% | 24.5% | 22.4% | 18.3% | 4 | ₹988 | Exit load of 1% if redeemed within 1 year. |
HSBC Infrastructure Fund | Equity | Very High | 56.44 | 0.99 | 8.6% | 22.7% | 22.4% | 19.2% | 18.4% | 3 | ₹2,412 | Exit load for units in excess of 10% of the investment, 1% will be charged for redemption within 90 days. See more |
Motilal Oswal Infrastructure Fund | Equity | Very High | 12.85 | 1.02 | 21.4% | -- | -- | -- | -- | -- | ₹131 | Exit load of 1%, if redeemed within 3 months. |
Tata Infrastructure Direct Plan-Growth | Equity | Very High | 193.56 | 1.16 | 5.8% | 19.4% | 20.0% | 19.1% | 16.7% | 1 | ₹2,084 | Exit load of 0.25% if redeemed within 30 days. |
Before making an investment decision in a mutual fund, it is crucial to check if it is the right fit for you.
Here are some key advantages of investing in an infrastructure mutual fund
The infrastructure sector has seen significant growth in the past and has the potential to continue growing. Investing in an infrastructure mutual fund can help investors capitalise on the sector's growth potential.
The government has continued its commitment to boost infrastructure development through several policies and incentives. The government’s focus on infrastructure growth can further drive the sector ahead, making infrastructure funds an ideal investment avenue.
Infrastructure companies have the potential to earn a steady cash flow through projects such as airports, highways, bridges, energy, and utilities. Tools, fees, and other recurring income can help these companies generate a steady stream of cash, benefiting both the companies and investors.
Infrastructure funds can serve as a hedge against inflation, making them a suitable investment in such conditions. Inflation-linked contracts are commonly used in the infrastructure sector, which can increase revenue as inflation rises.
Professional fund managers manage an infrastructure mutual fund, which eliminates the need to pick individual stocks or time the market. This makes investing in the sector convenient and straightforward.
An infrastructure fund focuses solely on the infrastructure sector. A higher concentration in one sector exposes the fund to greater risk, and the sector's underperformance can significantly impact the fund’s performance.
The infrastructure sector relies heavily on favourable government policies and regulations. Any negative changes in the regulatory environment or the withdrawal of incentives can directly impact the sector's and the mutual fund's performance.
The economic conditions play a crucial role in the performance of the infrastructure sector. The sector performs well during economic expansions but is negatively affected during economic slowdowns. Further, market conditions and company-specific risks can affect the performance of an infrastructure fund.
The interest rate environment poses a significant risk to the infrastructure sector. Infrastructure companies often use debt to fund projects. A rise in interest rates can make borrowing more expensive and affect the sector's performance.
Infrastructure mutual funds are typically equity-focused and are subject to capital gains tax.
Gains on units sold for less than 12 months are subject to a 20% short-term capital gains tax. If the units are sold after 12 months and the gains exceed the threshold limit of ₹1.25 lakh, the gains are subject to a 12.5% long-term capital gains tax.
Debt-oriented infrastructure mutual funds allocate less than 35% of their funds to equity. Regardless of the holding period, the gains on these funds are added to the investor’s income and taxed at the applicable income tax rate.
An infrastructure fund is a sectoral mutual fund that invests in equity or debt instruments of companies in the infrastructure sector.
Investing in an infrastructure fund can offer diversification and higher-growth potential. Moreover, the infrastructure sector has been receiving steady government support, with a focus on further development.
Infrastructure funds carry a higher risk because their performance is affected by regulatory policies, economic conditions, and interest rates.
Yes. Infrastructure funds can be suitable for beginners as they allow investors to gain exposure to the infrastructure sector conveniently. Professional fund managers manage these funds, eliminating the need for investors to pick stocks.
Infrastructure mutual funds are suitable for a long-term investment horizon.
Equity-oriented infrastructure mutual funds are subject to capital gains tax based on the holding period. Gains on debt-oriented infrastructure funds are added to the investor’s income and taxed at the applicable income tax rate, irrespective of the holding period.
Now let us jump and check about these top 15 mutual fund schemes.
Fund Performance: The ICICI Prudential Infrastructure Direct-Growth has given 23.79% annualized returns in the past three years and 25.11% in the last 5 years. The ICICI Prudential Infrastructure Direct-Growth comes under the Equity category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Infrastructure Direct-Growth via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹8,311Cr |
| 1Y Returns | 3.9% |
Fund Performance: The Nippon India Power & Infra Fund has given 27.59% annualized returns in the past three years and 24.92% in the last 5 years. The Nippon India Power & Infra Fund comes under the Equity category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Power & Infra Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹7,707Cr |
| 1Y Returns | 12.0% |
Fund Performance: The LIC MF Infrastructure Fund has given 29.92% annualized returns in the past three years and 25.53% in the last 5 years. The LIC MF Infrastructure Fund comes under the Equity category of LIC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in LIC MF Infrastructure Fund via lump sum is ₹5,000 and via SIP is ₹200.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹1,046Cr |
| 1Y Returns | 11.7% |
Fund Performance: The Quant Infrastructure Fund has given 21.7% annualized returns in the past three years and 21.25% in the last 5 years. The Quant Infrastructure Fund comes under the Equity category of Quant Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Quant Infrastructure Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹3,072Cr |
| 1Y Returns | 8.4% |
Fund Performance: The Franklin Build India Fund has given 25.67% annualized returns in the past three years and 23.18% in the last 5 years. The Franklin Build India Fund comes under the Equity category of Franklin Templeton Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Franklin Build India Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹3,213Cr |
| 1Y Returns | 5.7% |
Fund Performance: The DSP India T.I.G.E.R. (The Infrastructure Growth and Economic Reforms Fund has given 28.24% annualized returns in the past three years and 25.54% in the last 5 years. The DSP India T.I.G.E.R. (The Infrastructure Growth and Economic Reforms Fund comes under the Equity category of DSP Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in DSP India T.I.G.E.R. (The Infrastructure Growth and Economic Reforms Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹5,788Cr |
| 1Y Returns | 16.9% |
Fund Performance: The Invesco India Infrastructure Fund has given 26.16% annualized returns in the past three years and 23.12% in the last 5 years. The Invesco India Infrastructure Fund comes under the Equity category of Invesco Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Invesco India Infrastructure Fund via lump sum is ₹1,000 and via SIP is ₹100.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹1,456Cr |
| 1Y Returns | 7.9% |
Fund Performance: The SBI Infrastructure Fund has given 21.04% annualized returns in the past three years and 20.37% in the last 5 years. The SBI Infrastructure Fund comes under the Equity category of SBI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in SBI Infrastructure Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹4,804Cr |
| 1Y Returns | 3.7% |
Fund Performance: The Bank of India Manufacturing & Infrastructure Fund has given 27.2% annualized returns in the past three years and 23.38% in the last 5 years. The Bank of India Manufacturing & Infrastructure Fund comes under the Equity category of Bank of India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Bank of India Manufacturing & Infrastructure Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹755Cr |
| 1Y Returns | 18.9% |
Fund Performance: The HDFC Infrastructure Fund has given 24.45% annualized returns in the past three years and 23.08% in the last 5 years. The HDFC Infrastructure Fund comes under the Equity category of HDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HDFC Infrastructure Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹2,416Cr |
| 1Y Returns | -0.0% |
Fund Performance: The Kotak Infrastructure and Economic Reform Fund has given 19.67% annualized returns in the past three years and 22.62% in the last 5 years. The Kotak Infrastructure and Economic Reform Fund comes under the Equity category of Kotak Mahindra Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Kotak Infrastructure and Economic Reform Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹2,373Cr |
| 1Y Returns | 4.9% |
Fund Performance: The Canara Robeco Infrastructure Direct-Growth has given 26.33% annualized returns in the past three years and 24.5% in the last 5 years. The Canara Robeco Infrastructure Direct-Growth comes under the Equity category of Canara Robeco Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Canara Robeco Infrastructure Direct-Growth via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹988Cr |
| 1Y Returns | 10.1% |
Fund Performance: The HSBC Infrastructure Fund has given 22.69% annualized returns in the past three years and 22.41% in the last 5 years. The HSBC Infrastructure Fund comes under the Equity category of HSBC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HSBC Infrastructure Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹2,412Cr |
| 1Y Returns | 8.6% |
Fund Performance: The Motilal Oswal Infrastructure Fund comes under the Equity category of Motilal Oswal Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Motilal Oswal Infrastructure Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹131Cr |
| 1Y Returns | 21.4% |
Fund Performance: The Tata Infrastructure Direct Plan-Growth has given 19.36% annualized returns in the past three years and 20.04% in the last 5 years. The Tata Infrastructure Direct Plan-Growth comes under the Equity category of Tata Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Tata Infrastructure Direct Plan-Growth via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹2,084Cr |
| 1Y Returns | 5.8% |
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