After launching an infrastructure fund in collaboration with Macquaire and IFC, State Bank of India is in the process of setting up 'several' other funds to cash in on the area, which is gaining importance as an alternate asset class.
"The bank is at an advanced stage in setting up a general purpose private equity fund jointly with sovereign entities in Oman. The Indian Government has designated the bank as the operationalising agency for a similar sovereign fund with Qatar. Several other funds are at various stages of formation," SBI said in its latest annual report.
SBI has already set up an infrastructure fund in association with Macquarie of Australia and IFC Washington primarily aimed at investing in India's infrastructure space.
"All necessary regulatory approvals have been received for operationalising the fund. Over $1 billion has been mobilised from large and well-known international investors including the sponsors," the bank said.
The Macquarie-SBI Infrastructure Fund would continue to raise capital during the year. Together with Indian domestic institutions, the total capital is projected to be between $2 billion to $3 billion.
Private equity is gaining importance as an alternate asset class among the Indian Inc. This primarily prompted the largest lender of the country to enter into the area, which offers attractive returns as well.
"As some of the funds initiated by the bank are on the verge of operationalisation, the bank is poised to play a leading role in this promising sector in coming years," SBI said.
The bank had in November last year signed a Memorandum of Understanding with the Sultanate of Oman to launch a private equity fund. The initial corpus of the fund was pegged at $100 million which could be increased to $1.5 billion over the next few years.
According to global consultancy firm Grant Thornton, 15 private equity deals were announced in India amounting to $493.94 million in April this year as against 32 deals aggregating $562.85 million in the same month last year.
In 2008, 312 deals were announced in India with a total value of $10.59 billion.
