With the proposed $150-million commitment (debt and equity) in Axis Bank, the International Finance Corporation’s (IFC’s) investments in India in 2014 will cross $1.9 billion, of which equity alone is estimated to be around $800 million. The World Bank’s investment arm has since 1956 invested in 377 companies in India, providing over $10.3 billion (till June 30 this year) in financing for its own account and $2.9 billion in mobilisation from external resources.
So far this year, IFC has invested $1.9 billion in India across 30 deals. The investments have already exceeded the $820 million it had committed itself to in 2013. According to Venture Intelligence, IFC invested $800 million in equity across 17 transactions, of which it invested alone (without any co-investor) in 10 transactions.
During financial year 2014, IFC invested in 30 companies across sectors like renewable energy (ACME Solar, Azure Power, DJ Energy and others), banks (Kotak, Axis Bank, Federal Bank, Ratnakar Bank and YES Bank), microfinance institutions (Bandhan, Equitas, Janalakshmi, Magma, Suryoday, Ujjivan), telecommunication (Idea Cellurlar), infrastructure (UltraTech Cement, Uttar Urja Projects).
India is the biggest investment destination for IFC. As of June 30, its portfolio in the country stood at $4.7 billion, with a focus on energy, water, roads, phone connections, health care, education, sanitation, waste management, and financial inclusion.
IFC has invested around $255 million in MFIs and NBFCs, including Bandhan, Cholamandalam Investment and Finance, Punjab National Bank Housing Finance Ltd, Janalaxmi Financial Services, Vistaar Financial Services, Magma Fincorp Ltd and Au Financiers Ltd, so far this year.
This is in addition to the $120 million invested in the sector in 2013, when IFC put money in companies like Dewan Housing Finance Corporation Ltd, Equitas Microfinance, Ujjivan Financial Services, Suryoday Microfinance and IFMR Rural Channel and Services.
Strategy
IFC has been concentrating on low-income, rural, and fragile regions while building infrastructure and assisting public-private partnerships; facilitating renewable energy generation; promoting cleaner production, energy and water efficiency; supporting agriculture; creating growth opportunities for small businesses; reforming investment climate; encouraging low-income housing; and making affordable healthcare accessible.
IFC is undertaking focused business development efforts to find investment opportunities in frontier countries in the South Asian region and frontier regions within India. However, IFC is also seeing new prospects in Bangladesh, Nepal and Sri Lanka prospects for new investments.
“IFC aims to promote inclusive growth, particularly in the low-income states of India and post-conflict and frontier parts of the region; help address climate change impacts; and encourage global and regional integration, including promoting investments from South Asia into Africa. Inclusion, climate change, and integration are three pillars of our strategy in the South Asian region,” said IFC.
