Best Infrastructure Mutual Funds in India for 2026

Summary
power, roads, railways, ports and construction.

Comparing returns, costs, portfolio holdings and risk can help you choose a suitable infrastructure fund.

These funds suit long-term investors with a high risk appetite and a diversified portfolio.

Infrastructure mutual funds are schemes that invest in companies engaged in the construction, operation or financing of core physical assets such as roads, ports, power and railways. These funds allow investors to gain targeted exposure to India’s ongoing capital expenditure cycle, with performance closely tied to government policy, execution timelines and interest rate movements. Let’s understand which infrastructure mutual funds stand out in 2026.

Best 10 Infrastructure Mutual Funds: Quick Comparison

The following table provides an overview of the best infrastructure mutual funds in India:

Fund Name	Category	AUM (in ₹ cr)	3Y CAGR(%)	5Y CAGR (%)	Benchmark 5Y Return (%)	Expense Ratio (%)	Minimum SIP (₹)	Risk
ICICI Prudential Infrastructure Fund	Equity/ Thematic-Infrastructure	8,550	19.72	23.70	22.09	0.98	100	Very High
Nippon India Power & Infra Fund	Equity/ Thematic-Infrastructure	8,043	21.01	22.53	17.88	0.81	100	Very High
DSP India T.I.G.E.R. Fund	Equity/ Thematic-Infrastructure	6,264	22.69	22.59	22.09	0.73	100	Very High
SBI Infrastructure Fund	Equity/ Thematic-Infrastructure	4,852	16.64	18.13	17.88	0.87	500	Very High
Franklin Build India Fund	Equity/ Thematic-Infrastructure	3,256	19.44	20.58	22.09	0.82	500	Very High
Quant Infrastructure Fund	Equity/ Thematic-Infrastructure	3,205	19.12	20.00	17.88	0.65	1,000	Very High
HSBC Infrastructure Fund	Equity/ Thematic-Infrastructure	2,453	16.09	18.88	17.88	0.83	500	Very High
Kotak Infrastructure and Economic Reform Fund	Equity/ Thematic-Infrastructure	2,447	16.69	20.26	17.88	0.63	100	Very High
HDFC Infrastructure Fund	Equity/ Thematic-Infrastructure	2,444	17.49	20.07	22.09	0.96	100	Very High
UTI Infrastructure Fund	Equity/ Thematic-Infrastructure	2,162	14.79	14.88	17.88	1.48	500	Very High

Note: The funds listed here are for information only and are not investment recommendations.

The ICICI Prudential Infrastructure Fund, DSP India T.I.G.E.R. Fund, Franklin Build India Fund, and HDFC Infrastructure Fund use the BSE India Infrastructure TRI as their benchmark.

NIFTY Infrastructure TRI is the benchmark for Nippon India Power & Infra Fund, SBI Infrastructure Fund, Quant Infrastructure Fund, HSBC Infrastructure Fund, Kotak Infrastructure and Economic Reform Fund, and UTI Infrastructure Fund.

Top 10 Infrastructure Mutual Funds in India

Here is a closer look at ten established infrastructure mutual fund schemes:

1. ICICI Prudential Infrastructure Fund

ICICI Prudential Infrastructure Fund has delivered strong long-term performance, with a 3-year CAGR of 19.72% and a 5-year CAGR of 23.70%, outperforming its benchmark over both periods. Its portfolio is led by InterGlobe Aviation, Larsen & Toubro, Oberoi Realty, NTPC and Shree Cement. The fund has an expense ratio of 0.98% and allows investors to start a SIP with ₹100. Its consistent long-term track record is impressive, although returns remain closely tied to the performance of the infrastructure sector.

2. Nippon India Power & Infra Fund

This fund has generated a 3-year CAGR of 21.01% and a 5-year CAGR of 22.53%. The portfolio composition is tilted towards the power sector through holdings such as Reliance Industries, Larsen & Toubro, NTPC, NTPC Green Energy and Bharat Heavy Electricals. The expense ratio is 0.81%, while the minimum SIP is ₹100. Its strong recent performance is a key positive, though the higher exposure to power stocks can increase sector-specific risk.

3. DSP India T.I.G.E.R. Fund

DSP India T.I.G.E.R. Fund recorded the highest 3-year CAGR in this list at 22.69%, along with a 5-year CAGR of 22.59%. It maintains a diversified portfolio across industries, market capitalisations and both public and private sector companies. The fund charges an expense ratio of 0.73%, and both the minimum SIP and lump sum investment start at ₹100. Its balanced diversification reduces concentration risk, although the sector’s narrowness remains a limitation.

4. SBI Infrastructure Fund

With a 3-year CAGR of 16.64% and a 5-year CAGR of 18.13%, the returns on the SBI Infrastructure Fund have been relatively modest. Its major holdings include Reliance Industries, Bharti Airtel, Larsen & Toubro, Shree Cement and Adani Ports. The expense ratio is 0.87%, and investors can begin with a ₹500 SIP. The fund benefits from a long operating history and a large asset base, but its long-term returns have been comparatively lower.

5. Franklin Build India Fund

This fund has delivered consistent long-term returns. The 3-year CAGR is 19.44%, and this figure rises to 20.58% for five years. Its top holdings include Larsen & Toubro, Oil and Natural Gas Corporation, Reliance Industries, InterGlobe Aviation and NTPC, with a greater focus on large-cap companies. The expense ratio is 0.82%, and the minimum SIP is ₹500. Its conservative investment approach may appeal to investors looking for more stable exposure to the infrastructure sector.

6. Quant Infrastructure Fund

Quant Infrastructure Fund delivered a 3-year CAGR of 19.12% and a 5-year CAGR of 20.00%. Its portfolio is concentrated in stocks such as Adani Power, Samvardhana Motherson International, Kalyani Steels and Life Insurance Corporation, reflecting its high-conviction investment approach. The fund has one of the lowest expense ratios in the category at 0.65%, although the minimum SIP is ₹1,000, the highest on this list. Its focused portfolio can support strong returns, but it also comes with higher stock-specific risk.

7. HSBC Infrastructure Fund

HSBC Infrastructure Fund has given a 3-year CAGR of 16.09% and a 5-year CAGR of 18.88%. The portfolio is spread across sectors through companies such as Bharti Airtel, NTPC, Bharat Electronics, Larsen & Toubro and Reliance Industries. It has an expense ratio of 0.83%, with a minimum SIP of ₹500. While diversification across multiple infrastructure-related industries is a strength, its returns have been relatively modest.

8. Kotak Infrastructure and Economic Reform Fund

Unlike traditional infrastructure funds, Kotak Infrastructure and Economic Reform Fund follows a broader investment approach linked to economic reforms. Its top holdings include Larsen & Toubro, Reliance Industries, Bharti Airtel, Indus Towers and Solar Industries India. The fund has delivered a 3-year CAGR of 16.69% and a 5-year CAGR of 20.26%. It also offers one of the lowest expense ratios at 0.63%, with a minimum SIP of ₹100. Its wider investment universe adds diversification, although its recent returns trail some of the better-performing peers.

9. HDFC Infrastructure Fund

HDFC Infrastructure Fund has earned a 3-year CAGR of 17.49% and a 5-year CAGR of 20.07%. Key holdings include Larsen & Toubro, ICICI Bank, Kalpataru Projects International, NTPC and InterGlobe Aviation. The fund’s expense ratio is 0.96%, while the minimum SIP is ₹100. Its diversified exposure, including financial companies linked to infrastructure growth, is a positive, but it remains affected by movements in the infrastructure sector.

10. UTI Infrastructure Fund

This is the smallest and weakest performer here, with a 3Y CAGR of 14.79% and 5Y CAGR of just 14.88%, both well behind the 17.88% benchmark. Top holdings are Bharti Airtel, Larsen & Toubro, Reliance Industries, InterGlobe Aviation, and Adani Ports. Expense ratio is the highest in this list at 1.48%, and minimum SIP is ₹500. Its long operating history is a strength, but high cost paired with weak returns is a clear limitation.

How We Selected These Infrastructure Funds

We shortlisted these infrastructure mutual funds based on a few key factors beyond recent returns. 

• Assets under management (AUM): Larger funds were given preference as they generally offer better liquidity and greater investor confidence.
• Performance: Mutual funds were compared against their benchmarks across different time periods to evaluate performance stability.
• Expense ratio: Lower costs were preferred since they help investors retain more of their returns over the long term.
• Data verification: NAV, AUM, returns and other key details were cross-checked using reliable sources before preparing the final list.

Infrastructure Funds vs Other Fund Categories

Infrastructure funds are one route into India’s growth story, but not the only one. Here is how they compare with other equity categories.

Criteria	Infrastructure Funds	Flexi Cap Funds	Large Cap Funds
Sector focus	Single theme, infrastructure only	Spread across sectors and market caps	Mostly large, established companies
Risk level	Very high	Moderate to high	Moderate
Diversification	Low, sector concentrated	High	Moderate
Return potential	High but cyclical	Steady, market-linked	Comparatively stable

• Sector focus: Infrastructure funds concentrate 80% of their assets in one theme, making them a direct bet on the sector’s growth cycle, while flexi cap funds spread investments across multiple sectors and market caps, and large cap funds stick to established, well-known companies.
• Risk level: Infrastructure funds carry the highest risk, while flexi cap funds fall in the moderate-to-high range. Large cap funds remain comparatively safer, anchored by investments in stable companies.
• Diversification: Infrastructure funds offer the least diversification since they’re concentrated in one sector, flexi cap funds provide the highest diversification across sectors and caps, and large cap funds fall in between with moderate spread.
• Return potential: Infrastructure funds offer high, policy-linked returns. Flexi cap funds provide steadier, market-linked growth. Large cap funds deliver more stable returns.

Benefits and Risks of Infrastructure Mutual Funds

Investing in infrastructure funds comes with both benefits and risks.

Benefits:

• Growth potential: Growth potential is tied to the pace of national capital expenditure, giving these funds a strong link to policy-driven expansion.
• Cash flow visibility: Many infrastructure companies earn through tolls, tariffs and long-term contracts, which can provide steady earnings.
• Inflation protection: Some infrastructure businesses can pass on higher costs, helping protect their earnings during inflation.

Risks:

• Sectoral concentration: Since these funds invest only in infrastructure-related companies, a slowdown in the sector can affect their performance.
• Regulatory dependence: Infrastructure companies depend on government approvals and policies. Any delays or policy changes can affect their business and, in turn, the fund’s performance.
• Interest rate sensitivity: Debt runs high in this sector, which means borrowing costs eat into margins whenever rates move up.

Who Should Consider and Avoid Infrastructure Funds?

Infrastructure funds are not a fit for every investor, and knowing where you stand matters before committing capital.

These funds can be considered by investors who:

• Have a high risk appetite
• Have a horizon of five years or longer
• Already hold an existing diversified core portfolio

Avoid these funds if you:

• Have a short time horizon
• Have low tolerance for volatility
• Have no diversified equity base to fall back on

How to Choose an Infrastructure Mutual Fund

A careful selection process can make it easier to identify infrastructure funds that meet your investment needs.

1. Check long-term returns

Look at how the fund has performed over three and five years and see how that stacks up against its benchmark.

2. Assess risk levels

Metrics like standard deviation and downside capture can tell you how a fund holds up when markets turn volatile or start falling.

3. Compare expense ratio

It might seem like a small number on paper, but a lower ongoing cost makes a real difference once you’re holding the fund for several years.

4. Review the fund manager’s history

As sector funds work within a narrow set of stocks, picking the right ones takes real skill, and a manager’s track record matters more here than in a diversified fund.

5. Study portfolio composition

A fund’s portfolio reveals where it invests and how diversified it is, helping you understand its overall investment approach.

SIP vs Lump Sum for Infrastructure Funds

SIP and lump sum are the two common ways to enter an infrastructure fund, and each suits a different situation.

Systematic Investment Plan (SIP)  works well here because it spreads entries across market cycles. It can help absorb sharp swings, though returns can lag a lump sum during a sustained growth phase.

Lump sum can work for investors entering during a clear correction, putting the entire amount to work immediately. This approach carries a higher timing risk in a volatile sector such as infrastructure.

Direct vs Regular Infrastructure Funds

Direct and Regular plans mainly differ in cost and the level of guidance they offer.

Direct plans are designed for investors who prefer managing their investments on their own. Since there’s no distributor commission, these plans have a lower expense ratio, allowing investors to retain a larger share of the fund’s returns over time.

Regular plans are a better fit if you want professional assistance with your investments. The higher expense ratio covers distributor commissions and ongoing support.

Taxation of Infrastructure Mutual Funds

Infrastructure mutual funds are taxed like other equity mutual funds. The tax you pay depends on how long you hold your investment.

• Short-term capital gains (STCG) on units held for 12 months or less are taxed at 20%.
• Long-term capital gains (LTCG) on units held for more than 12 months are taxed at 12.5% on gains exceeding the ₹1.25 lakh annual exemption limit.

Final Thoughts

Infrastructure mutual funds offer exposure to India’s growing infrastructure sector. They have the potential to generate strong returns over time, but their concentrated approach can also lead to higher volatility.

Infrastructure funds are best used to complement a diversified portfolio rather than form its core. Investing through SIPs can make it easier to handle market ups and downs over time.

FAQs