IL&FS infra debt fund to raise Rs 1,000 crore

Eyes 10 investments by March 2014-end

To refinance projects in sectors such as power and mining, IL&FS Infrastructure Debt Fund (IDF) plans to raise about Rs 1,000 crore from domestic insurance companies and banks in a second round of funding.

Ramesh Bawa, managing director of IL&FS Financial Services (promoter of IDF), said the fund had raised Rs 750 crore in the first round. The company has refinanced two projects in the power and mining sectors.

To facilitate the IDF, IL&FS has inked pacts with five public sector general insurance companies — General Insurance Corporation of India (GIC), National Insurance Company, Oriental Insurance Co, New India Assurance Co and United India Insurance. G Srinivasan, chairman and managing director of New India Assurance, said his company and GIC had indicated they would invest Rs 100 crore each, while the others would invest Rs 25 crore as indicative amounts.

The five insurers have stakes of 10 per cent each in the company. These insurers were free to take individual decisions on investments, Srinivasan said.

Bawa said discussions for investing in three projects were underway, adding IL&FS IDF aimed to finance 10 projects by the end of March. These projects are already operational and, therefore, the funding exposure doesn’t involve execution risks.

LIC has already invested Rs 125 crore in IL&FS IDF’s first scheme, closed in December 2013. It had also agreed to securing two per cent equity stake in the asset management company managing IL&FS IDF, it said.

Soon, IDF will float close-ended scheme (s) with maturity periods of five-15 years.

Besides IL&FS, ICICI Bank, IDFC and IIFCL and IDBI have also floated infrastructure debt funds. The corpus of these companies will primarily be used to take over loans extended by banks and financial institutions.