The Hindu Business Line : Birla Infrastructure Fund: Sharp fall in banking

Birla Infrastructure is a theme-based fund that seeks to invest in stocks of companies that are participating in the infrastructure growth and development in the country. Launched in March 2006, the fund has been actively churning its portfolio to ride the boom in the engineering and infrastructure space. We take a look at how the fund managed its portfolio during the quarter ended December 2006.

Birla Infrastructure continued its heavyweight position in industrial capital goods over the quarter. However, exposure to banking sector, which occupied the second slot in September, was sharply reduced from 11.3 per cent to about 4 per cent of the total assets. Cement stocks replaced banks with an allocation of 12 per cent. Holding in stocks with market capitalisation of over Rs 5,000 crore remained unchanged at around 65 per cent.

The engineering space underwent some shuffling. Emco, Greaves Cotton and RPG Transmission exited the portfolio, while recently listed Lanco Infratech was the new addition. With Larsen & Toubro expanding its wings in West Asia, the fund appeared positive on the stock. It increased its holding in L&T by 4.5 times since September 2006.

In the construction space, the fund took fresh exposures to Patel Engineering but sold Hindustan Construction and Gammon India. Sobha Developers and Ansal Properties & Infrastructure were bought while holding in Mahindra Gesco Developers increased by 66 per cent. Quasi real estate plays, hotel stocks, also witnessed some action. While holding in Taj GVK Hotels & Resorts remained unchanged, Indian Hotels was accumulated. With banking stocks losing steam after a brief out-performance, Birla Infrastructure pruned its holding in the sector. State Bank of India, Syndicate Bank, Oriental Bank of Commerce and Bank of India took the exit route, while Andhra Bank was the only new addition.

The energy sector also lost steam. ONGC, Reliance Energy, Hindustan Petroleum and NTPC were out of the portfolio. Power Trading Corporation and Indraprastha Gas, however, found favour and entered the portfolio.

Mr Mahesh Patil manages Birla Infrastructure. The fund had Rs 508 crore of assets under management in December 2006.

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