Eyeing to raise initial corpus of $1-billion, the government run infrastructure development company India Infrastructure Finance Company Limited (IIFCL) Tuesday launched its first infrastructure debt fund (IDF).
IIFCL has launched the debt fund through the mutual fund route.
After launching the new scheme here, Finance Minister P Chidambaram said the fund would help mobilise long-term financing for infrastructure projects.
“We should try to mobilise resources from insurance and pension sectors as these funds are available for long term horizon,” the finance minister said.
Chidambaram said introduction of the new scheme by the IIFCL would “pave the way for setting-up of more such infra debt funds.”
Besides IIFCL, other investors in the debt fund include Canara Bank, Oriental Bank of Commerce, Corporation Bank and HUDCO.
The new scheme will mainly undertake investment in debt securities or securitised debt instruments of infrastructure companies, infrastructure capital companies or infrastructure projects, special purpose vehicle (SPV), bank loans etc. with the investment objective of capital appreciation and trade on the stock exchange, according to a statement issued by the finance ministry.
IIFCL chairman S K Goel said the IDF will complement commercial banks in providing the required long-term funding to infrastructure sector and help in addressing their asset liability mismatch.
Goel said IIFCL is targeting an initial corpus of $1 billion by attracting both domestic and international investors.
The regulations for infrastructure debt fund, through mutual fund and non-banking finance company route, were issued by the financial regulators, Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI), following the announcement made by the government of India in financial year 2011-12.
While speaking on the launch of this maiden IDF scheme of IIFCL Mutual Fund (IDF),
Finance Minister said that for Infrastructure Debt Funds (IDFs), we should try to mobilise resources from insurance and pension sectors as these funds are available for long term horizon.
Chidambaram said that in order to give thrust to investment in infrastructure sector and to attain GDP growth rate of 8 percent, there is an immense need for financial products such as IDFs, Takeout Finance and Credit Enhancement to fill the financial gap in the infrastructure sector.
Chidambaram congratulated IIFCL and the other participating investors of IIFCL Mutual Fund (IDF) for this landmark event of launch of the IDF scheme, which will pave the way for setting-up of more such infra debt funds.
The maiden IDF scheme will mainly undertake investment in debt securities or securitized debt instruments of infrastructure companies, infrastructure capital companies or infrastructure projects, SPV, Bank Loans etc. with the investment objective of capital appreciation and trade on the Stock Exchange, aimed at development of bond market in the country.
The regulations for Infrastructure Debt Fund, through Mutual Fund and NBFC route, were issued by the financial regulators, SEBI and RBI, following the announcement made by Government of India in financial year 2011-12.
--With Agencies Inputs--
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