PM Modi is returning to power, we will see big push in infra, predicts ace investor Mark Mobius

Mark Mobius, Founding Partner of Mobius Capital Partners, has said that PM Narendra Modi will return to power for a third tenure after the Lok Sabha elections. He said his return to power for the third term would mean the continuation of his policies and a major boost to the infrastructure sector. 

"The big question mark is whether he can get a number of seats to change the constitution. I doubt that it will happen at this stage but it could happen and if it does, we will see another big push in India for big changes taking place, particularly in the infrastructure arena," Mobius told CNBC International.

Mobius said his focus is now on Indian infrastructure-related stocks, hinting at a strong push in the sector. "Infrastructure is going to see a good push going forward."

He said he has strong confidence in India's power sector, underscoring the significant global power demand and the expansion of Indian companies setting up power plants globally. Mobius stressed the necessity to potentially double India's power capacity soon, driven by rising cell phone usage, advanced chips, and consumer needs.

Mobius told CNBC International: “India needs more power and of course that is not only coal-fired, but sun fired, wind fired, so in any way you get more power, it is going to be necessary. So you need to have probably a doubling of power capacity in India going forward. Consumers have cell phones and they have to power up these cell phones, all the high powered chips need more power and of course consumers are consuming more and that means more power is needed. So this is going to be a big growth area in my view.

Earlier this week, Mobius said he has full faith that Indian markets will deliver 14-15% returns over the longer term.  An ace investor himself, Mobius said the Indian stock market can give potential returns over the next three to five years. 

"Over the longer term, I believe you are talking about 14-15% returns for India." 

He explained that as a general rule of thumb, one can double the GDP growth rate of the market to estimate stock market returns.  With India's real GDP growth at 7-8%, Mobius projects the stock market to deliver returns of 14-15-16% in the future.