The Hindu Business Line : IDFC plans to launch second pvt equity fund

AFTER the success of its India Development Fund (IDF), IDFC is now setting the stage to unveil its second private equity fund with a corpus of Rs 1,300 crore with the same objective of investing in infrastructure development projects.

Unlike the IDF, the new fund will have foreign investors to the extent of two-thirds of its corpus.

IDFC is preparing to kick off the road show, with greater focus in the overseas market, shortly.

IDF, which is India's first private equity fund for infrastructure with a corpus of Rs 850 crore, has already made a string of investments in infrastructure projects in ports, power, and hotel sectors.

IDFC-Asset Management Co Ltd, a 100 per cent subsidiary of IDFC, manages the fund, in which IDFC is the core investor with other investors such as SBI, LIC and Bank of Baroda.

Mr Rajiv Lall, Managing Director and CEO of IDFC, said that the second fund would also be managed by the same company.

"There is lot of excitement among foreign investors in the Indian infrastructure sector, but there are very few vehicles through which they can play in this market. The fund will be providing them that vehicle. I expect the fund to be in place within 8-10 months," he told newspersons on Tuesday.

IPO by June-end

IDFC is planning to launch its proposed IPO by June-end depending on market conditions, Mr Lall said. IDFC will be also marketing the IPO overseas.

Refusing to divulge the size of the issue, he only said that it would be "very substantial".

While none of the existing shareholders are expected to exit, there would be some dilution of their current stake.

"The Government, which now owns 40 per cent stake in IDFC (after the 15 per cent RBI stake was transferred to the Government), will continue to remain the single largest shareholder, although its holding will be diluted."

Mr Lall also said that IDFC was planning to come out with new products.

"One area that will find more focus is treasury - we want to change this segment from a passive cash manager to an independent profit centre. We will also be looking at equity and asset management, as we want to invest in listed equities."

IDFC was targeting a net loan CAGR growth of 30 per cent over the next five years, with increased exploration of the four frontiers of urban services, rural infrastructure, health and education.

During the last three years, IDFC's net loans have grown at a CAGR of over 50 per cent, with its project finance assets of over Rs 8,000 crore.

IDFC's return on assets was 5.5 per cent last fiscal, the highest among any bank or financial institution in India.

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