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IFCI, Sycamore launch India infra fund

The Indian development finance institution and the US-based venture capital firm have launched a new Indian infrastructure fund targeting $500m from both foreign and domestic investors. IFCI has agreed to commit 10% of the fund’s total capital.

Development finance institution Industrial Financial Corporation of India (IFCI) together with Princeton, New Jersey-based venture capital firm Sycamore Ventures has launched an infrastructure fund targeting $500 million.

The IFCI-Sycamore Infrastructure Fund will focus on making equity investments in infrastructure projects and infrastructure companies in India, according to a statement. Sectors targeted could include roads, bridges, power transmission, railways, and airports as well as coal mines and power generation.

IFCI will commit 10 percent of the fund’s total capital, according to a statement, with a minimum commitment of $50 million.

Sycamore and IFCI are looking to raise capital from both domestic and foreign investors, and the fund will be registered as a venture capital fund with the Securities and Exchange Board of India.

The two firms said in a statement that India’s “favourable policy environment” as well as the government’s $1 trillion target for infrastructure investments in the 2012-2017 Five-Year Plan has created “unparalleled potential for mobilising private capital in infrastructure”.

Sycamore and IFCI could not be reached for comment.

IFCI’s activities include merchant banking, microfinance, and venture capital in addition to project finance. The group also has a dedicated infrastructure and real estate subsidiary, IFCI Infrastructure Development, and has also launched a programme to issue tax-free, long-term infrastructure bonds.

Sycamore Ventures has invested in five Indian infrastructure companies focused on railways, power generation, logistics and oil and gas, according to a statement. The firm was founded in 1995 as a spin-out from Citigroup Venture Capital.