UTI Asset Management Company said on Thursday that it has set up a $500 million (around Rs 2,500 crore) infrastructure-focused private equity fund, India Infrastructure Development Fund.
The fund is being set up in association with two off-shore partners -- HSH Nordbank, (HSH) Germany and Noor Financial Investment Company of Kuwait. HSH Nordbank is a major financier in the transportation sector especially in shipping and aviation. In India, it has participated in debt financing for the modernisation of the Delhi airport. Noor is the financial arm of NIG Group, a conglomerate.
The fund will invest in unlisted companies engaged in the infrastructure sector. It has already made its first investment which is in a city gas distribution project.
"Infrastructure sector is a focus area for government of India and it needs huge investments over the next four-five years. A significant number of PPP (public-private partnership) projects across various infrastructure sectors are being offered to the private developers. Recognising this potential, UTI AMC has decided to set up this fund mainly with a view to channelise funds from offshore investors," UTI AMC chairman and managing director U K Sinha said.
UTI is the latest to join the infrastructure-focused PE fund bandwagon. State Bank of India, which has tied up with Macquarie and IFC is eying the space, while IDFC and Citi have has already set up IDFC Project Equity with commitments of $927 million (around Rs 4,500 crore) so far.