Growth in affordable housing finance companies
According to a report released by FICCI, affordable housing finance companies catering to low-income customers have grown at an impressive pace over the past five years. Loan books of these companies grew from close to Rs 1,000 crore in March 2013 to over Rs 27,000 crore in December 2017 and they facilitated the ownership of more than 230,000 homes. It is estimated that there is a demand-supply gap of 20 million in the housing sector, providing a long runway for the growth of housing finance companies.
In related news, the Central Government has approved the construction of 1.5 lakh houses for the urban poor under the Pradhan Mantri Awas Yojana – Urban (PMAY -U). This takes the total tally to 47.52 lakh housing units built so far under the program. The latest approval entails an investment of Rs.7,227 crore. Under the PMAY-U, the government is targeting the construction of 1.2 crore houses for urban poor by 2022.
You can invest in the theme with the Affordable Housing smallcase.
Infra attracts pension funds & PE firms
Infrastructure output, calculated by the growth of 8 core industries, rose by 4.7% on a year-on-year basis in April 2018. The best performing sector was cement, which recorded 16% y-o-y growth in the month, compared to 13.3% growth in March 2018. This was the 6th straight month of growth for the sector. Increased budgetary support for affordable housing, growth in rural economy and rise in infrastructure spend are expected to support cement demand in the future as well.
The infra sector has also been attracting attention of global pension funds and large private equity (PE) players. So far this year, such investors have raised $3.2 billion via 25 deals to be invested in the Indian infra sector. During the entire 2017 period such investors had raised $4.6 billion via 42 deals.
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Markets up marginally
Markets closed marginally up this week. Sensex closed up 0.87% at 35,227.3 and Nifty closed up 0.86% at 10,696.2. GDP growth rate for quarter ending March 2018 was 7.7% higher than street estimate of 7.3%.