Tamil Nadu Infrastructure Fund Management company plans to raise $1 billion

The AMC to establish and manage infrastructure financing vehicles in the state

The Tamil Nadu Infrastructure Fund Management Corporation Ltd (TNIFMC), an asset management company (AMC) formed under the Tamil Nadu Infrastructure Development Board (TNIDB), plans to raise an alternate investment fund of around $1 billion to support infrastructure development in the State. 

Speaking at the TN Infra: Vision 2023, organised by the Confederation of Indian Infrastructure (CII), S Krishnan, principal secretary to Government of Tamil Nadu, Planning & Development said that TNIFMC is established as an AMC regulated by Securities and Exchange Board of India (SEBI) to establish and manage new infrastructure financing vehicles (IFVs).

The fund is expected to be launched in the next six months.

TNIFMC will operate as an independent and professional Board run company with Board of Directors as per SEBI regulations. An Independent Investment Committee comprising of experts from technical, financial, commercial and legal fields will be formed to appraise investment infrastructure projects in the state, said Krishnan.

The TNIFMC's shareholding structure will involve the State government taking a 25 per cent stake, while the financial institutions, including Banks, insurance firms, pension funds and others will have another 50 per cent and the rest would be held by international investment bodies like Japan International Cooperation Agency (JICA).

The state government is also in talks with various international bodies, to bring in as shareholders.

"The $1 billion is just an indicative figure and we may even raise more than that. This would be a first of its kind infrastructure financing initiative by any State in India," he told reporters on the sidelines of the programme.

During his presentation, Krishnan said that the Board is planning to go for a regulatory filing shortly and is in the process of hiring a Chief Executive Officer from the market at competitive scales. It would be coming under the regulation of Sebi.

There would be three infrastructure financing vehicles (IFVs) - Alternate Investment Fund category 1, Tamil Nadu Infrastructure Development Fund and Infrastructure Investment Trust.

The IFV structure would help it to address challenges of raising huge resources required to fund infrastructure projects and it would not require State Government guarantee. It would help to arrange Indian and foreign investment from different pools of funds on long term basis, including from pension and infrastructure funds, sovereign wealth funds, impact funds etc.

Vision Tamil Nadu 2023: Phasing and Financing Plans

Target set for the infrastructure sector in the state is around Rs 13.73 lakh crore by 2023. Almost 28 per cent of this would go towards energy, 19 per cent towards urban infrastructure, roads and highways (10 %), Railways (14 %).

While the state contribution would be Rs 4.60 lakh crore, Rs 3.68 lakh crore from centre and the balance Rs 5.44 crore would be through PPP.

The state has identified key 217 projects, of which for 84 works have started, bidding stage (15), DPR/DFS Ready (28), preparatory stage (58), concept approved (12), prepartion yet to commence (20).