Kotak to raise $300 m for infrastructure investment

The Kotak Mahindra Group has said it will raise private equity funds of about $300 million (about Rs 1,050 crore) from both domestic and international investors to invest in infrastructure projects in India.

Sumitomo Mitsui Banking Corporation (SMBC) and Brookfield Asset Management will participate in the fund as cornerstone investors. The three entities, Kotak, SMBC and Brookfield, together will contribute up to 22.5 per cent of the fund's capital.

SMBC is one of the largest banks in Japan and a leading infrastructure advisor and project financier, while Brookfield is a leading global real estate, renewable power and infrastructure asset owner, with assets under management of over $100 billion that includes over $30 billion in renewable power and infrastructure.

Fund management

Kotak Investment Advisors, a group company, will manage the domestic fund and Kotak Mahindra (UK), another group company, will manage the offshore fund.

Kotak Investment Advisors currently manage or advise nearly $1.2 billion of alternate assets. Kotak Mahindra (UK) and its international affiliates manage offshore funds of close to $2.2 billion.

The investment will primarily be in power generation/ transmission, transport (roads, ports, airports) and other infrastructure (water treatment and supply, waste management, gas transmission, distribution and storage) projects and in infrastructure holding companies.

Mr C. Jayaram, Executive Director, Kotak Mahindra Bank, said, “We are delighted that we have marquee institutions like SMBC and Brookfield investing along with us in the infrastructure fund. SMBC and Brookfield will bring world-class, complementary experience and knowledge to the fund. Individually and collectively, the three entities strongly believe in the long-term growth prospects of the India infrastructure sector.”

Mr Suman Saha, who will head the investment team, said, “Indian infrastructure projects require a significant amount of external capital. While some of the financing will come from the capital markets, a lot of the early-stage financing has to be sourced from long-term capital providers such as private equity funds. We are creating a platform within the Kotak Mahindra Group that can help address this need, while at the same time giving investors access to one of the country's most promising investment stories.

“To start with, we are looking to raise $300 million from the international and domestic markets. In the medium- to long-term, our aim is to build a substantial presence in this space,” he said.

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