SBI, Macquarie, IFC to float $2 billion infrastructure fund

17 Apr 2008


Mumbai: The State Bank of India, the country's largest lender, along with the Macquarie Capital Group and the International Finance Corporation will float a $2-billion fund for investment in infrastructure in India.

SBI and Macquarie Capital will hold 45 per cent each in a new joint venture fund management company, while the IFC will hold the remaining 10 per cent.

The three will together contribute a total of $450 million in anchor investment to start the fund, which will raise further capital from both domestic and international institutional investors. The fund is scheduled to be launched by the end of the second quarter of 2008.

SBI chairman O P Bhatt will be the chairman of the company, while CEO and MD will be appointed by Macquarie Capital.

This is the first private equity fund launched by SBI, and it plans to have different tie-up for other sectors.

The fund intends to provide equity and equity-like capital for investments in traditional infrastructure such as roads, ports, airports and power. It will also look at investment opportunities in infrastructure-related assets and businesses.

SBI and Macquarie also signed an agreement to set up a fund management company, an SBI release said.

Several other banks and equity funds have launched infrastructure funds. The country's second largest bank, ICICI Bank, is in the process of setting up a $2-billion infrastructure fund.

Axis Bank is also in the process of raising $500 million. Citigroup and Blackstone, along with Infrastructure Development Finance Company and India Infrastructure Finance Company are also setting up a $5-billion fund for financing infrastructure development.

IIFCL and 3i have also come together to set up another infrastructure fund of around $5 billion. Vision Global has recently launched a $1-billion India Infrastructure-focused fund called 'Vision Global India Infrastructure Fund'.

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