Infra & consumption will power India’s GDP together: Mirae’s Bharti Sawant on next big investment theme

Mirae Asset’s Bharti Sawant believes India’s growth story is entering a powerful new phase, driven by twin engines of infrastructure expansion and rising consumption. As the fund house launches its Infrastructure Fund, she explains why private and PSU capex, policy reforms, and healthier corporate balance sheets are setting the stage for a multi-decade investment opportunity.

Edited excerpts from a chat:

What makes this the right time to launch an infrastructure-themed fund, especially when public capex has been strong for a few years and there are doubts over sustainable pick-up in private investment?Government has set the platform for Private Capex Participation through various structural reforms over the past 10 years. We witnessed substantial rise in Government Capex post pandemic and it is expected to stabilize at the current levels over the next couple of years. Going forward, we believe it is the Private & PSU Capex which is likely to do the heavy lifting given that corporate balance sheets look quite healthy with significant reduction in debt levels while opportunity landscape has improved. Further, with Capacity utilization levels hovering closer to the 80% mark – an indication for the Private Capex to pick up pace in a meaningful manner. Therefore, we believe that it is an opportune time to participate in this theme.The government’s Viksit Bharat 2047 agenda underscores infrastructure as a national priority. How does the fund intend to translate that vision into investible opportunities across sectors?Infrastructure is at the heart of India’s vision to become a Viksit Bharat by 2047 and grow into a USD 30 trillion economy. It’s no longer limited to traditional areas like roads, transport, energy, and utilities. Today, it also includes fast-growing new-age sectors such as digital networks, data centres, solar energy, the EV ecosystem, semiconductors, and even social infrastructure like housing, healthcare, and urban development. Because of this expansion, the Infrastructure theme has become broader, more dynamic, and packed with investment opportunities like never before.

How do you balance exposure between high-growth areas like data centres, semiconductors, renewables, and more mature segments such as utilities and power transmission?Under the Mirae Asset Infrastructure Fund, we aim to create a well-balanced mix of high-growth, mature, and special-situation businesses to deliver a smooth and rewarding investment experience. The fund will lean more towards high-growth companies, where near-term growth outpaces current ROCE. These businesses can help deliver meaningful alpha over the medium to long term. To balance this, we will also invest in mature companies that generate strong, steady cash flows. While their earnings may grow more slowly, they add crucial stability to the portfolio and help reduce volatility during market corrections. This mix allows us to capture powerful growth trends while maintaining earnings stability and limiting drawdowns. Additionally, the fund will selectively invest in special-situation opportunities—companies benefiting from favourable policy changes, technological advancements, or shifts in sector dynamics. These will be tactical, time-specific investments made as such opportunities arise.There are indications of a slowdown in the government capex cycle. So how do you intend to find high-growth opportunities in the infra sector?As mentioned earlier, while government capex is likely to level out in the coming years, strong policy support and healthier corporate balance sheets are expected to significantly boost private and PSU investments. For example, government initiatives like the Production Linked Incentive (PLI) scheme have accelerated capex in semiconductor and EMS industries. The need for data localization has also created strong demand for local data storage and processing. Similarly, policies like Approved List of Models & Manufacturers (ALMM) are driving deeper backward integration in the renewable sector—from solar modules to cells to wafers. All these factors point to one clear trend: India’s infrastructure cycle has moved into a long-term, structural, multi-decade growth phase.

What’s your outlook on private sector capex — is corporate balance sheet strength translating into actual investment activity on the ground?We are seeing early signs of a pick-up in corporate capex. There is a robust capex pipeline of orders announced by corporates over the next 5-7 years to the tune of ~USD 154 bn with visible order inflows across sectors like – Power, Renewables, Utilities, Metals, Logistics and Telecom. Even the recent corporate commentaries are quite encouraging suggesting a strong pipeline and on-ground execution.

Many infra-linked sectors have rerated sharply since FY22. How do valuations look across capital goods, logistics, and construction names now?While valuations are still trading at a premium compared to the long term average across different sectors within infrastructure space, the multiples have come off from their peak valuations over the past 12-18 months owing to a combination of price and time correction. On the other hand, there is a strong earnings visibility across sectors like – Capital goods, Realty, Materials, Telecom, Logistics, Infra, etc. for the next couple of years justifying the elevated valuations for this space.

With the BSE Infrastructure Index outperforming in recent years, what’s your approach to navigating cyclicality and avoiding overexposure at the top of the cycle?As part of our stock selection approach, we would focus on investing in businesses which are either at the start of the cycle or at the midcycle and avoid investing in businesses which are operating at the peak of their business cycle. Hence, we will be very mindful of valuations and potential earnings growth which the businesses can offer and accordingly, build positions under the fund.

The fund proposes a barbell strategy, combining high-growth with steady cash-flow businesses. Could you elaborate on how this helps manage volatility in a cyclical theme like infrastructure?High-growth businesses often show weak or even negative near-term cash flows because they are constantly reinvesting to scale. These companies usually trade at higher valuations and can face sharp swings during short-term slowdowns—even when the long-term outlook remains intact. To balance this risk, we also invest in mature businesses that generate steady cash flows and grow at or above GDP levels. These stable companies act as anchors in the portfolio, offering consistent earnings and cushioning the downside during volatile periods.

Given the broad definition of infrastructure – spanning logistics, realty, energy, defence, and even digital infrastructure – how will you ensure diversification without diluting the theme?Historically, different parts of the infrastructure sector have performed well at different times. This gives the fund manager flexibility to increase or reduce exposure to specific sectors across the infrastructure value chain. By diversifying meaningfully across sectors and taking thoughtful overweight and underweight positions at both the sector and stock level—the portfolio aims to deliver sustainable alpha over the medium to long term while keeping drawdowns lower. In this way, the fund stays true to its infra mandate while smartly balancing risk within the broader infra universe.

Finally, how do you see the market shaping up into 2026 — can infrastructure remain the dominant investment story, or do you expect leadership to rotate to other sectors?As we look ahead to 2026, the market backdrop continues to be favourable for infrastructure, and we believe the sector can sustain its leadership rather than see a sharp rotation away. Several structural factors support a prolonged upcycle. First, public-sector capex momentum remains intact. Central government spending priorities—particularly in transportation, energy transition, water, and urban development—show no signs of weakening. Multi-year project pipelines and improved execution capabilities among large contractors suggest that earnings visibility for the sector remains unusually strong. Second, we are seeing a broadening of private-sector participation, especially in manufacturing-linked infrastructure, renewables, data centres, and logistics. This is further reinforced by PLI-driven investments and corporate balance sheets that are significantly healthier than in prior cycles. The combination of rising demand, supportive policy, and easier access to capital creates a durable foundation for continued growth.

While leadership in equity markets typically rotates over time, the conditions for a meaningful shift away from infrastructure are not fully in place yet. Other sectors—such as consumption or financials—may contribute incrementally, but that does not mean that infrastructure would take a backseat as the sector continues to offer multi-year earnings runway, policy alignment, and capex visibility. Overall, as we approach 2026, we expect infrastructure to remain a dominant investment story, supported by strong fundamentals, sustained policy support, and improving balance sheets across the ecosystem.

In fact, infrastructure and consumption go hand-in-hand as key drivers of GDP. Infrastructure builds the foundation—the roads, power, logistics, and digital backbone—while consumption is the outcome of a stronger, more productive economy. If we want multi-decade consumption growth, sustained investment in infrastructure is essential. That’s why, even as the market evolves, we expect infrastructure to remain one of the most compelling and enduring investment themes heading into 2026.