IIFCL Mutual Fund is working towards setting up its second infrastructure debt fund, SB Nayar, Chairman and Managing Director, IIFCL, has said.

This fund would be on a much larger scale than the one launched in June last year, Nayar told BusinessLine in the capital.

The first IDF scheme launched by IIFCL Mutual Fund saw as much as Rs 300 crore mopped up from banks and financial institutions.

Unlike the first fund where there was no foreign investor interest, things could be different this time round, according to Nayar.

"Now scenario is different. There is more positivity. The foreign investors are interested in some sectors like clean energy. We are examining the options," Nayar said.

Plans are afoot to attract foreign investors' to participate in the new fund, he added.

Nayar said the entire Rs 300 crore mobilised from banks for the first IDF scheme has been fully invested. The funds have been mainly invested in power sector, road and water projects.

IDF STORY SO FAR

The concept of IDFs was launched in India with lot of fanfare during the erstwhile UPA-II rergime. But this vehicle has really not taken off so far.

Part of the reason is that investors are not coming forward. Banks are not keen to invest more as many had already reached the sectoral cap for infrastructure.

Also, given the high hedging cost on rupee, overseas investors have been reluctant to park money into IDFs in India.

India Infrastructure Finance Company Ltd (IIFCL) had set up an asset management arm --IIFCL Asset Management company to manage the mutual fund schemes floated by IIFCL Mutual Fund.

This state-owned infrastructure lender had opted for the mutual fund route for the launch of its maiden IDF.

>srivats.kr@thehindu.co.in

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