From the Group that has been among the pioneers in

the Indian Infrastructure sector through Tata

Infrastructure Fund
Now an opportunity to also invest in Global
Infrastructure
Quiz

 What has been the most popular

investment theme in India in the past 5
years?

 What has been the most popular

investment theme globally in the past 5
years?
A popular theme

Risk-return profile of five asset classes

Globally, Infrastructure as an investment theme offers superior

risk return profile to other popular asset classes
India and the world
 India’s economic growth is picking up momentum
 Indian stock markets have delivered good returns over
the past few years
 However there are other economies which are also
growing at good rates
 In a globalising world economy, portfolio allocation
should also reflect this global opportunity
 Thus investing in [India + other growing economies]
makes good sense
 What is the common link driving growth in various
emerging economies?

Educated people + infrastructure + economic governance

What drives
Infrastructure?
 As populations grow and people become free
 As economies around the world are freed from
shackles
 Natural growth forces start driving economic
prosperity
 Early economic prosperity drives more
aspirations
 People aspire for a better quality of life
 Companies aspire for higher and higher growth
 All this is possible only on the back of quality
infrastructure
Success breeds success

 Success stories of other countries is spurring

infrastructure development everywhere

 Examples of Singapore / Dubai / China

 We see this in India all around us.

 This is also happening in other parts of the

world

The above example is for illustrative purposes only. TIGIF may or may
not invest in the said countries or sectors
What is Infrastructure?
 People / Goods /services need to move more –
Ports / Airports / highways / railways etc
 Corporate growth needs more power
 People want to communicate more – Telecom /
IT / BPO etc
 People want better housing / water / Real
Estate etc
 All this needs to be financed – Banks /
Financial Institutions
 This story is the same in India and in many
parts of the world
Global infrastructure – Driver
of growth
 Infrastructure - The engine of growth for India
and for many other economies
 Sustainable economic growth over the long
term requires investment in new infrastructure
besides maintenance of existing ones
 Strong economic growth and increasing wealth
among consumers is driving infrastructure
investment globally.
 Higher incomes bring increased demand for a
better quality of life, enhanced government
services.
 Developed countries became competitive
economies on the back of quality infrastructure
Developed countries became
competitive economies on the
back of good infrastructure

Higher investment in infrastructure is a must for

an economy to become competitive & developed
Global Nominal GDP Growth
(2004-14)
(Strongly correlated to infrastructure
investment)

Source: Macquarie Research

GDP growth will drive demand for infrastructure

investment. Sustainable growth can only be
achieved through continued investment.
Asia Real GDP growth
(YoY)
Region 2005 2006 2007E 2008E
China 10.2 10.7 11.2 10.6
India 9.0 9.4 9.4 9.6
Korea 4.2 5.0 4.6 5.5
Indonesia 5.7 5.5 6.5 6.8
Taiwan 4.1 4.7 4.5 5.5
Thailand 4.5 5.0 4.0 5.8
HK 7.5 6.9 5.0 4.4
Malaysia 5.0 5.9 6.0 6.2
Singapore 6.6 7.9 7.0 8.0
Phillippines 4.9 5.4 6.2 5.6
Vietnam 8.4 8.2 9.0 9.4
Source: Credit Suisse estimates. Note: India's GDP growth is as per fiscal year; all else as
per calendar year. The above example is for illustrative purposes only. TIGIF may or may
not invest in the said countries or sectors.
Asia’s Capital Spending is
driving growth
GROSS FIXED CAPITAL FORMATION AS % OF GDP

China & India – sustain at high levels ASEAN – increase to support GDP growth
% of GDP % of GDP

45 45

40
40

35
35

30
30
25
25
20

20
15

15
10
88

06
87

89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
10

20
19
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
Asia ex-Japan Indonesia Malaysia
19 7

19 9
19 0
19 1
19 2
19 3
19 4
19 5
19 6
19 7
19 8
20 9
20 0
20 1
20 2
20 3
20 4
20 5
06
19 8
8
8
8
9
9
9
9
9
9
9
9
9
9
0
0
0
0
0
0

Philippines Singapore Thailand

19

Asia ex-Japan China India

Source: Thomson DataStream, as at Apr 07 (latest available data)

 “The infrastructure gap in India was holding back
economic growth by 1.5-2% every year”
P. Chidambaram, Finance Minister

“Growth in GDP is the main driver for investments in

infrastructure.” Jack Hennessy,
Baring Private Equity Asia

“Booming demand for infrastructure assets saw almost

US$100bn raised globally to fund deals in the sector during the
first half of 2006, a year-on-year increase of about 71%…
Demand is being fed by the number of pension funds looking to
infrastructure assets for stable, long-term returns that are
higher than government bonds.” Financial Times, 19 July 2006
Infrastructure as an asset class
globally
 The infrastructure story exists in most growing
economies of the world
 Low Risk and Volatility
 Basic, difficult to replace, essential services
 Monopolistic / near monopolistic assets
 Inelastic demand / growing
 Low sensitivity to management – due to essential nature and
high margins
 Strong cash flows
 Strategic competitive advantage – provides pricing power
 Low capex requirements once asset is operational
 Long term returns
 Physical, difficult to replace, long life assets
 Inflation correlated
 Due to demand inelasticity and / or regulatory pricing regime
Favourable Macro
Environment for Multi-year
Growth

Modernisation Population
& Upgrades Growth

Infrastructure
Demand
Outsourcing
GDP
e.g. efficiencies

Technology Shift Government

e.g. digital & spending
3G network Public demands
e.g. environmental
protection

Source: INVESCO
The global opportunity

Source : World Bank

Global infrastructure investment needs until 2030

estimated at US$30tr for transport, energy,
water, and communications infrastructure.
Infrastructure Value chain

Investment opportunities exist throughout the

infrastructure value chain
Risk-adjusted returns
Risk-adjusted returns on various asset classes for different time periods

Globally Infrastructure performed better over

a longer period than most other asset classes
Significant diversification
available
 Global universe of listed infrastructure companies made up
of approximately 700 companies capitalised at more than
USD$4.0 trillion.
 There is significant diversification among countries and
sectors

Source : Macquarie Research

Development of
Infrastructure Projects in
emerging Asia
China
Hong Kong
 The government plans to spend
 2007/08 financial budget planned for 40 new >USD12.9bn on 180 projects in Tibet by
infrastructure schemes (~USD1.98bn). 2010 to improve the connectivity. These
Feasibility study to construct bridge linking include road and water supply projects.
HK, Macau & Zhuhai across the Pearl River
estuary costing ~USD3.8bn.
Philippines

Thailand  Committed to PHP1.7 trillion (US$34bn)

• The government will spend THB160bn
(~USD4.6bn) on 3 new mass transit
projects in Bangkok, with ~48% financed
by the central budget & domestic loans
and THB84bn from Japan Bank for Int'I
Cooperation loans.
Vietnam
 The government invites private
investment in a World Bank-funded
USD44m water project in Ho Chi
Minh City.
programme for 2006-2010. Infrastructure
spending represents 4.45% of GDP. Power
& transportation sectors are expected to
benefit most.
Australia
 Under the 12th Federal Budget,
A$22.3bn to be spent on road, rail &
ports over 2010-2015, in addition to the
existing commitment of ~A$15.8bn.
 A$10bn over 10 years to sustain water
supply.

Source : Invesco. As of 31st May 2007. The above example is for illustrative purposes
only. TIGIF may or may not invest in the said countries or sectors.
 Some Global
Infrastructure
Investment Themes
Investment Theme 1:
China – Water Treatment
 China has 21% of the world’s population
but only 7% of the renewable water Private investment in water &
supply. sewerage projects in China
US$ Millions
1400
 The total volume of freshwater resources
1200
is 2.8 trillion cubic metres (2,200 m3 per
head), which is 31% of the world 1000

average. 800

600
 In a ‘normal’ year, China faces a water
400
shortfall of 40bn m³.
200
 China has opened its water sector to
0
foreign and private capital as to improve 199119921993199419951996199719981999200020012002200320042005

efficiency.

China plans to spend US$125bn* to boost urban water treatment

from 52%* in 2005 to 70% by 2010
Source: Goldman Sachs Global Investment Research, World Bank, as at January 2006 (latest available
data)
•Source: Ministry of Construction, China, 2006 (latest available data), ASIANINFRASTRUCTURE-issue 147,
May 2007. The above example is for illustrative purposes only. TIGIF may or may not invest in the said
Investment Theme 2:
Airports
 China: Number of airports increased from
142 to 186 by Year 2010 with total
spending of US$17.9bn as CAAC forecasts
passenger growth of 14% p.a. for 2006-
2010 to 540m.
 India: Privatisation of Mumbai and Delhi
Airports in 1Q2006. Will India follow China
in boom in Air Travel?

Source: AsianInfrastructure, Issue 139, Civil Aviation Administration of China (CAAC),

Macquarie, Jan 2007 (latest available data) . The above example is for illustrative purposes
only. TIGIF may or may not invest in the said countries or sectors.
 From the Group that has been among the
pioneers in the Indian Infrastructure sector
through Tata Infrastructure Fund
Tata Infrastructure Fund
 Launched on November 29, 2004
 First open ended equity mutual fund
dedicated to infrastructure sector.
 Infrastructure has been the most popular
investment theme since then
 What we said during the NFO has played
out
 Disciplined, process-driven investment
strategy.
 Patient, bottom-up stock picking.
Tata Infrastructure Fund
Performance

(%) CAGR as on 31/07/07

Since Inception Last 1 year

Tata Infrastructure 51.58 66.66

Fund
BSE SENSEX 39.37 44.74

Date of Allotment : Dec 31, 2004. Past performance may or

may not be sustained in future. Returns are given for growth
option.
Benefits of investing in
global listed infrastructure
securities

 These companies typically display a strategic

comparative advantage, economies of scale &
relatively inelastic demand, appealing to a
broadening range of investor seeking:
 stable returns
 low volatility
 stable earnings from essential services
 diversification across geographic regions, sectors &
securities
 access to a unique & growing asset class
 diversification into infrastructure assets which often
have long concession terms
An example of Prospective
geographical distribution *

10% 5%

20%
65%

Domestic Asia Global Ex-Asia Cash

NB: * illustrative purpose only and subject to change. Kindly refer offer
document for investment pattern. The investment universe outside India
may evolve in the future based on emerging opportunities.
Tata Indo-Global
Infrastructure Fund
 Name, Nature and Investment objective: Tata Indo-Global Infrastructure Fund: A 3 years close-
ended equity scheme. Upon completion of 3 years, the Scheme will automatically be converted into
an open-ended scheme, without any further reference from the Mutual Fund/Trustee/ Unitholders.
 The investment objective of the scheme is to generate long term capital appreciation by investing
predominantly in equity and equity related instruments of companies engaged in infrastructure and
infrastructure related sectors and which are incorporated or have their area of primary activity, in
India and other parts of the world.
 Sale at Rs. 10/- per unit for cash at face value during the New Fund Offer. Minimum Investment
Amount: Rs. 10,000 and in multiples of Re. 1 thereafter. Investment Pattern : Equity and Equity
related instruments of domestic companies*: 65% - 85%, Foreign Securities* as permitted by
SEBI/RBI: 15% - 35%, Debt and Money Market Instruments: Upto 35%.
 Two Options for Investment: Dividend Option and Growth Option. Applicable Load Structure &
Repurchase facility: Exit Load: NIL NAV publication: Once every week i.e. on each Wednesday
during close ended period and on all business days subsequent to the scheme's conversion into an
open end scheme. Repurchase facility: First Wednesday of every month (immediately next business
day if such Wednesday is a holiday) and on all business days subsequent to the scheme's
conversion into an open-ended scheme. New Fund Offer Expenses not exceeding 6% of the amount
mobilized will be charged to the Scheme and shall be amortized over a close ended period. In case
of redemption before expiry of close ended period, proportionate unamortized NFO expenses will be
recovered from the redemption proceeds of the investors. Investors are urged to study the terms of
the Offer carefully and to consult their tax advisor at the time of investment and or redemption of
units in the fund.
Risk Factors
 Statutory Details: Constitution: Tata Mutual Fund (TMF) has been set up as a Trust
under the Indian Trust Act 1882. Sponsors: Tata Sons Limited and Tata Investment
Corporation Limited. Trustee: Tata Trustee Company Pvt. Ltd. Investment Manager:
Tata Asset Management Ltd. Risk Factors: l All investments in Mutual Funds and
securities are subject to market risks and there is no assurance or guarantee that the
objectives of the Scheme will be achieved. l As with investment in stocks, shares and
securities, the NAV of the Scheme can go up or down depending on factors and forces
affecting the Capital Market. l Past performance of the previous schemes, the sponsors
or its group affiliates are not indicative of and do not guarantee future performance of
the Scheme. l The Sponsors are not responsible or liable for any loss resulting from the
operation of the Scheme beyond the initial contribution of Rs. 1 Lac made by them
towards setting up the mutual fund. l Investors in the scheme are not being offered any
guaranteed or assured rate of return. l Tata Indo-Global Infrastructure Fund is only the
name of the scheme and does not in any manner indicate either the quality of the
schemes, its future prospects or returns. l Investment in foreign Securities in subject to
various risks such as currency fluctuations, restrictions on repatriation, changes in
regulations, political, economic and social instability and the prevalent tax laws of the
respective jurisdictions. l For scheme specific risk factors and other details please read
the offer document carefully before investing. l Copy of Offer Document and Key
Information Memorandum along with application form may be obtained from the office
of Tata Mutual Fund, Fort House, 221, Dr. D. N. Road, Mumbai 400 001 or at your
nearest collection centres.
*predominantly in companies engaged in infrastructure / infrastructure related sectors.
(It also includes units of overseas mutual funds and exchange traded funds which
invest predominantly in equity / equity related instruments of companies engaged in
infrastructure sectors and infrastructure related sectors).