Arth Infra NBFC Theme

Key Points:

• Smallcase Type: Equity Thematic
• Suitable For: Long Term Investors
• Risk Profile: Aggressive
• Recommended Holding Period: 3 to 5 Years and more.
• Recommended Investment: Upto 10% of your Equity allocation.

Rationale:

• India’s USD 1 trillion infrastructure investment pipeline by 2030 will unleash one of the largest long-term credit demands cycles the country has ever seen.
• Debt markets will be the backbone of this capex boom, creating a massive, sustained lending opportunity for institutions positioned to finance long gestation infra-assets.
• Specialized infrastructure NBFCs are set for hyper-growth, as they dominate financing in power especially renewables railways and urban development, providing high-yield, high-visibility lending avenues.
• Large PSU banks, insurance giants and leading private banks are gearing up to deploy significant capital, ensuring deep liquidity and a multi-year expansion cycle in infrastructure financing.
• Renewable energy financing is exploding, with government priority and sectoral clarity enabling NBFCs and banks to scale rapidly and capture premium credit demand.
• This is a decade long compounding theme, financial institutions focused on infra lending can see expanding loan books, improving asset quality and strong recurring returns as they fund India’s biggest growth engine.

Disclosure:

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