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IL&FS likely to raise $1 bn for infra debt fund by September

IL&FS Financial Services expects to close USD 1 billion of its targeted USD 5 billion infrastructure debt fund by September, a top company official has said.

IL&FS Infra Asset Management, which manages the infrastructure debt fund, has targeted an initial corpus of around USD 1 billion and hopes to increase the overall corpus to USD 5 billion under management in the medium-term.

“There is an adequate interest from both domestic as well as global investors for investing in infrastructure projects in India. We are confident of completing the raising of USD 1 billion in the next 6 months,” company’s managing director and CEO Ramesh Bawa told.

The company has so far raised Rs. 750 crore and expects to raise another Rs. 750 crore by March 31.
“By March 31, we would have raised nearly Rs. 1,500 crore, which is from the domestic investors. However, in the next six months, we are confident of meeting our USD 1 billion target and we expect good response from global investors as well,” he said.

The firm has pooled in funding from at least five PSU insurance companies, including General Insurance Corporation of India, Oriental Insurance, United India Insurance, New India Assurance and National Insurance, which will together pick 2 per cent stake each in the company.

IL&FS has also tied up with public sector lenders like Allahabad Bank, Bank of India, Canara Bank, Central Bank of India, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce and UCO Bank for picking up stake in the firm.

“This move will provide confidence to overseas investors, especially foreign pension funds and insurance companies, which can participate in the fund. We are already in talks with Japanese, Australian, Chinese and Canadian firms for investment,” he said.

Bawa said the company is likely to formalise partnership with Japanese and Chinese firms post elections.

“There is huge interest from global investors, but they are waiting for the right time. We believe that in the next 2-3 months, that is after elections, we will be able to close deals with Japanese and Chinese companies,” he said.

The USD 1 billion would be used for funding projects in power, ports, road, healthcare, education and other sectors.

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