India's NIIF to acquire infrastructure lender

IDFC IFL lends to operating infrastructure projects, with the goal of allowing earlier project finance lenders to recycle the capital loaned for construction. According to IDFC’s most recent annual report, the portfolio includes roads, power transmission, renewable energy, hospitals, and education projects, with no non-performing assets as of March 2018. Its loan book currently stands at more than INR45 billion ($609 million).

Financial terms of the transaction have not been disclosed. The deal marks the first investment from NIIF’s strategic fund, which backs infrastructure projects and companies across a range of sectors that are of economic and commercial importance and likely to benefit from India’s growth trajectory.

“The long-term nature of NIIF’s strategic fund, its strong governance and underwriting standards, combined with NIIF’s ability to attract capital, will allow us to build on a strong platform created by IDFC and continue to grow the business,” said Sujoy Bose, managing director and CEO of NIIF, in a statement. “This investment demonstrates the ability of NIIF to make commercially attractive counter-cyclical investments.”

India’s government launched NIIF in 2015 aiming to raise about INR400 billion for investments in transportation, energy, and urban infrastructure, spread across a mother fund and three subsidiary vehicles. In addition to the strategic fund, the platform also manages a master fund focused on creating scalable platforms in core infrastructure and a fund of funds to invest in third party infrastructure-focused fund managers.

The master fund has raised about $2.5 billion since its launch from investors including Temasek Holdings, the Abu Dhabi Investment Authority (ADIA), and the Asian Infrastructure Investment Bank (AIIB), while the fund of funds has a target of about $6.2 billion.

NIIF’s investments include the acquisition of a controlling stake in logistics player Continental Warehousing earlier this year alongside Dubai-based port operator DP World. It is also an anchor investor, along with the UK government, in the Green Growth Equity Fund (GGEF), a PE vehicle set up last year to invest GBP500 million ($710 million) in sustainable infrastructure projects in India.

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• Topics
• South Asia
• Infrastructure
• Financials
• Buyouts
• India
• National Investment Infrastructure Fund (NIIF)
• Financial Services