At a time the global economy is slowing and investors are shying away from equity markets, the Indian infrastructure sector contines to attract global equity funds. India-specific infrastructure funds worth over Rs 30,000 crore are in various stages of being raised.
Important among them include a Rs 12,000-crore fund from ICICI ventures, a Rs 8,000-crore fund from Macquarie Capital Group, the SBI and International Finance Corporation (IFC), and a Rs 4,000-crore fund from Kotak Investment Advisors Ltd.
In this calender year, India-focussed infrastructure funds of around Rs 10,000 crore have been raised to date. These include an over Rs 4,900-crore fund from 3i capital, Rs 2,000 crore offerings by Citigroup and Rs 800 crore raised by AXIS PE.
Experts say with India going for a massive modernisation of infrastructure in the 11th Five-Year Plan period, global investors are keen to invest in the early stages of these projects. The Plan estimates an investment of Rs 20 lakh crore in physical infrastructure like electricity, railways, roads, ports, airports and irrigation. Out of this, Rs 10.64 lakh crore is expected to come from sources other than debt.
Suman Saha, chief investment officer of the Rs 4,000-crore Kotak Infrastructure fund, which will be launched shortly, said, “There is still a lot of interest and enthusiasm among global investors. Huge equity investments can be expected in the transport sector, comprising ports, highways, airports, railways and power. Since these are long-gestation projects, the temporary rise in the cost of finance and economic slowdown will not have any major impact”.
Experts say since a number of infrastructure projects are being implemented jointly by public and private sector entities, investors are preferring to put their money in a particular company to get exposure to a basket of projects.
Jagannadham Thunuguntla, Head of Equity, Nexgen Capitals Ltd, said, “An interesting trend is that most investments in 2007 and 2008 have come at the company level rather than in special purpose vehicles. This shows that investors want exposure to a basket of projects that a particular infrastructure company has bagged.”
