The Hindu : Business : IDFC's second equity fund

Online edition of India's National Newspaper
Friday, Mar 10, 2006

Business

Business

IDFC's second equity fund

Special Correspondent

Huge investment opportunities exist in airport projects

NEW DELHI: The Infrastructure Development Finance Corporation (IDFC) is likely to raise about $350-450 million through its second infrastructure equity fund, which is to be targeted solely at institutional investors.

With this mop-up, the corporation's equity exposure will be poised to touch $1 billion, IDFC Managing Director and CEO Rajiv B. Lall told newspersons here on Wednesday. Mr. Lall explained that the fund, with a lock-in period of two years, was not meant for retail investors as investment in infrastructure entities was a risky venture. The minimum mop-up through this fund was expected to be about $350 million and Mr. Lall noted that the IDFC's equity portfolio would stand increased to about $1 billion from $650 million.

Mr. Lall revealed that the IDFC had brought in the former CEO of Birla Sun Life, Nishid Shah, to manage this private equity fund. Set for closing on March 31, the fund, he said, was likely to see a mop-up of about $450 million. IDFC's first fund, launched in 2004, had fetched $200 million. The IDFC's stake in the first equity fund is 12 per cent and its share in the second fund will remain the same at 12 per cent. The corporation, with equity holdings in six to seven infrastructure projects, including a less than 10 per cent share in the GMR's Delhi Airport modernisation project, has unrealised gains of about Rs 250 crore from these projects. It has been earning an incremental rate of return at 35-40 per cent for the last few years.

Mr. Lall said huge investment opportunities existed in airport projects in Delhi, Mumbai, Chennai and Bangalore.

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