NIIF equity investments average less than Rs 1,000 cr in past 5 years

NIIF has invested of Rs 4,689 cr since December 2015 inception, while the co-investment by its partners stood at about Rs 7,053 crore at the end of September 2020

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The National Investment and Infrastructure Fund (NIIF) in its five years of existence has made equity investments of less than Rs 5,000 crore in infrastructure projects, sources said. That works out to less than Rs 1,000 crore per year on average.

The Rs 40,000-crore NIIF was set up in December 2015 as an institution for enhancing infrastructure financing by investing in greenfield (new), brownfield (existing) and stalled projects.

According to sources, NIIF has made an equity investment of Rs 4,689 crore, while the co-investment by its partners stood at about Rs 7,053 crore at the end of September 2020.

The quasi-sovereign wealth fund's total equity investment along with partners stood at Rs 11,742 crore as of September 2020.

At the same time, the long-term debt investment was at Rs 7,935 crore, taking aggregate investment to the tune of Rs 19,677 crore.

Set up as Category II Alternative Investment Fund (AIF), the NIIF currently manages three funds with distinct strategies Master Fund, Fund of Funds and Strategic Opportunities Fund. NIIF's total assets under management (AUM) is at over USD 4.4 billion across the three funds, as per the latest factsheet provided by the NIIF.

As far as the road sector is concerned, NIIF has taken the brownfield route to enter the segment following acquisition of Essel Devanahalli Tollway and Essel Dichpally Tollway last year. The acquisition was done through NIIF Master Fund.

In November 2020, the Union Cabinet approved proposal for an equity infusion of Rs 6,000 crore by the government in NIIF Debt Platform sponsored by the National Investment and Infrastructure Fund (NIIF), comprising of Aseem Infrastructure Finance Limited (AIFL) and NIIF Infrastructure Finance Limited (NIIF-IFL).

Of the total amount, only Rs 2,000 crore would be allocated during the current year 2020-21, while the remaining amount in the next fiscal.

However, in view of the unprecedented financial situation and availability of limited fiscal space due to the prevailing COVID-19 pandemic, the proposed amount may be disbursed only if there is readiness and demand for debt raising, the official statement had said.

NIIF will take all necessary steps to use the equity investments from domestic and global pension funds and sovereign wealth funds expeditiously.

The proposal to invest Rs 6,000 crore as equity into NIIF is part of the Aatmanirbhar Bharat 3.0 package announced by Finance Minister Nirmala Sitharaman on November 12, 2020.

The NIIF Strategic Opportunities Fund has set up a debt platform comprising an NBFC Infra Debt Fund and an NBFC Infra Finance Company. NIIF through its Strategic Opportunities Fund (NIIF SOF) owns a majority position in both the companies and has already invested Rs 1,899 crore across the platform.

The Strategic Opportunities Fund (SOF fund) through which the NIIF investment has been made will continue to support the two companies apart from investing in other suitable investment opportunities, it had said.

The current proposal seeks Government of India's investment directly to further scale the potential and impact of the two entities in the infrastructure debt financing space.

"This will also support the efforts of the platform to raise international equity.

"With the fresh infusion of equity by the government, besides the equity already infused by NIIF SOF and potential equity participation from the private sector, the debt platform is expected to raise enough resources to extend a debt support of Rs 1,10,000 crore to projects by 2025," it had said.