India Infrastructure Finance Company Ltd (IIFCL) today said it expects its $1 billion (about Rs 5,000 crore) infrastructure debt fund (IDF) to be operational by the end of next month.
"The company has initiated the process for launching an IDF along with other co-sponsors and investors for a corpus of around $1 billion with an investment of around Rs 1,500 crore through mutual fund route" IIFCL Chairman and Managing Director SK Goel said after announcing its annual performance.
"We expect before May end this IDF may be operational," he said, adding, the company has already got provisional approval from the Sebi.
He said, IIFCL decided to go for mutual fund route because it is more flexible.
Of the total fund size, $500 million would be raised from the domestic market while remaining would be from the overseas market, he said.
Domestic investors would include IIFCL, IDBI Bank and LIC while ADB has committed $200 million, Barclays and HSBC likely to bring in $150 million each.
The country's poor infrastructure, which is seen as a major bottleneck for economic growth, requires an estimated investment of a whopping $1 trillion in the 12th Plan, beginning 2012 and ending 2017. Of this, 50% is expected to come from the private sector.
When asked about resource raising plan for the current fiscal, Goel said, "we may raise Rs 10,000 crore from tax free bonds during the current fiscal.
This sum would be raised in tranches. The first tranche could be before June while the second one would be in before March, he added.
Besides, LIC has committed Rs 1,000 crore and ADB has also sanctioned $240 million, he said.
When asked about rating outlook cut by Standard & Poor's, Goel said, "The rating outlook of the government owned institutions cannot be higher than the sovereign rating. So accordingly, our rating outlook has been revised."
Meanwhile, global rating agency Standard & Poor's revised downward the rating outlook of four public sector entities, including EXIM Bank and IIFCL, to negative from stable following the agency's revision of country's sovereign outlook.
IIFCL get funding from multi-lateral institutions. So rating revision has no impact on the company, he said.