IDF to fund three major core projects

The India Development Fund (IDF), one of the largest infrastructure private equity funds in the country, would be funding three major upcoming infrastructure projects in the country including modernisation of both Delhi and Mumbai airports and a project at Pipavav in Gujarat.

IDF, managed by the Infrastructure Development Finance Corporation (IDFC), has so far invested between 25-30 per cent of its corpus into half a dozen projects. The fund either picks up a stake in companies or form joint ventures, while investing in the project.

Besides GSPL, in which IDF has picked up a 20.5 per cent stake on Thursday, the other projects that IDF has so far participated in include the projects by GMR Energy Ltd, Container Corporation of India, Gujarat Pipavav Port Trust. The fund is also part of a consortium that will take up modernisation of the Delhi and Mumbai airports.

GMR Energy Ltd (GEL) is the leading power generation company in south India. GEL operates two power plants, including the world's largest barge mounted plant, and is setting up a third plant.

"IDF has already committed between 25 per cent and 30 per cent of its assets, which include both joint ventures and picking up stake in companies. IDF will continue to invest into companies operating in core infrastructure, urban and rural infrastructure along with social and technology related infrastructure projects," said Darius Pandole, chief operating officer, IDFC Asset Management Company Ltd.

Commenting on the Concor deal, Pandole said that this includes setting up of a joint venture worth Rs 300 crore. "Three controlled atmosphere stores are to be set up under the JV, and while one each has been finalised at Delhi and Mumbai, location for the third is being worked out," Pandole said.

He added that the controlled atmosphere stores will initially deal in storage of apples. IDF is leading the consortium of financial companies that are part of the restructuring of the Pipavav project in Gujarat.

"We are leading the financial companies that will pump in a new capital of Rs 800 core, of which Rs 600 crore will be through debt and Rs 200 crore through equity," Pandole said. He added that the new promoters Maersk and A P Moeller are taking over the operations of the project.

He also said that IDF is also part of the financial consortium that is funding the modernisation projects of the Mumbai and Delhi airports, but said that the amount of money that IDF will pump into these projects is still unclear.

The formation of the Rs 844 crore India Development Fund was announced by the Finance Minister in his 2002 Budget speech, to facilitate equity investment in infrastructure facilities.

The fund's objective is to achieve attractive returns through the generation of a combination of current income and capital appreciation by investing in equity of portfolio companies.

The fund normally looks at investing between Rs 30 crore to Rs 150 crore through equity in companies for a stake of between 10 per cent to 50 per cent in portfolio companies.