Infra stocks rise on the back of national monetisation plan optimism

 Adani Ports and SEZ, Hindustan Petroleum, and ONGC rose 7.8 per cent, 5 per cent and 3.5 per cent respectively over two days

Infrastructure stocks have seen some buying interest over the past two days after the finance minister launched an ambitious plan worth Rs 6 trillion to monetise public infrastructure projects like power plants, roads, and railways. The Nifty Infrastructure index rose 1.2 per cent over the last two days.

Adani Ports and SEZ, Hindustan Petroleum, and ONGC rose 7.8 per cent, 5 per cent, and 3.5 per cent respectively over two days. While cement companies like Ramco Cements, Ambuja Cements, and UltraTech are up between 0.4 per cent and 2.5 per cent, shares of Larsen & Toubro rose 0.8 per cent during the same period.

The National Monetisation Plan (NMP), as the scheme is called, aims at monetizing the government's brownfield infrastructure to fund greenfield ones. The central idea behind the scheme is to raise more revenues by monetizing existing brownfield infrastructure assets and channel these additional revenues into building greenfield infrastructure.

Analysts said that since the pandemic began, kickstarting capital expenditure, especially on infrastructure, has been a priority for the government.

In a note, Teresa John, Research Analyst (Economist), Nirmal Bang, said, "Seasoned infrastructure investors are likely to benefit from the monetisation program while domestic EPC players, power transmission companies, cement manufacturers etc will benefit from infrastructure spending by the government."