Infra Debt Fund
In an attempt to ensure free flow of funds for the Indian infrastructure sector, the infra debt fund strongly supported by the IL&FS and Life Insurance Corporation of India, is planning to raise up to $1 billion from both overseas and domestic investors. The fund will use trust structure (mutual fund route) for this venture since it provides flexibility to invest in green-field projects as well, besides, power, ports and road projects, said managing director and chief executive of IL&FS Financial Services, Ramesh Bawa, adding that shortly after getting final approval from Securities and Exchange Board of India, the fund will start raising money in next few months.

It may be recalled that in May last year, the player had said that they would set up an infrastructure debt fund with a targeted corpus of $2 billion but its board has advised to initially raise $1 billion and then scale up size beyond $2 billion based on requirements and performance, as also due to the IL&FS standing, there is adequate interest, and it does not face challenge in raising money, especially from global investors. The fund will approach Japanese and Australian investors including pension funds. The share of overseas money in funds is expected to be 50-60% and the remaining portion will come from domestic investors. Initially LIC was to take 10% stake in proposed IDF. But, now with a change in regulatory norms for investment it may take higher stake and it has now been permitted to hold up to 30% stake in a company. LIC makes long-term investments into equity and debt instruments and has already invested in various infrastructure companies for facilitating long term growth in the sector.