Srei Venture planning $250 million core fund

Srei Venture Capital is set to raise $250 million infrastructure-focussed fund by April 2007.

To mob up the fund, the company will tap the UK's Alternative Investment Market (AIM) or the main UK market. This will be Srei's first overseas fund-raising, with the companies contribution at 2-5 per cent.

The AIM market was established by the London Stock Exchange in 1995, with the intention that it should be a less costly route. This was used by the smaller companies to raise capital both on their introduction to the market and thereafter.

Srei Venture Capital is a wholly owned subsidiary of Srei Infrastructure Finance, which is into financing infrastructure equipment, infrastructure projects and renewable energy projects. Srei Infrastructure manages assets worth of around Rs 4,500 crore.

Raghav Kanoria, senior manager, Srei Venture Capital said this new fund will focus on the entire gambit of infrastructure projects in India right from oil & gas to roads to power projects.

"This is the growth area and we have expertise in funding infrastructure projects. This is another step to consolidate our position in the marketplace," he said.

This is the second time that Srei is attempting to raise Rs 1,000 crore plus fund after it launched the India Global Competitive Fund (IGCF) in mid-2005. "We have raised around $80 million (Rs 360 crore) for this fund and we are in the process of raising further funds," Kanoria added.

This fund was launched with an objective to assist any Indian company to expand its operations so that they can achieve global size.

"The IGCF is a Private Equity (PE) fund backing Indian companies across any sector, while the new fund will focus on infrastructure. With India emerging as one of the most favoured business destinations globally, the companies are in a phase of scaling up their operations through rapid expansion of their capacities both through organic and inorganic growth. Most of these companies would be needing access to finance for such activities," Kanoria added.

International Finance Corporation (IFC), DEG, Germany (Financial Institution owned by the Government of Germany), FMO, the Netherlands (Financial Institution owned by the Government of the Netherlands) and BIO (Belgium Financial Institution owned by the Government of Belgium) are among the large stakeholders in the company.