L&T readies infra debt fund

L&T Infrastructure Finance is joining a handful of private equity firms taking advantage of distressed opportunities in India’s infrastructure market.

L&T Infrastructure Finance, the investment arm of Indian construction group Larsen & Toubro, is poised to launch a Rs2708 crore ($500 million: €380 million) infrastructure debt fund.

Dubbed L&T Infrastructure Debt Fund, the fund will look to invest in distressed assets, particularly in renewable energy, roads and thermal power projects.

A media representative of L&T declined to comment on behalf of the firm.

In February, N Sivaraman, president on L&T Holdings, publicly announced the firm’s intent to launch an infrastructure debt fund. He has been particularly vocal about opportunities in debt funds that are primarily focused on “refinancing deals, where developers are looking for better pricing on the operational projects and banks are looking to lighten their exposures in the infrastructure sector,” he told a local Indian newspaper.

L&T isn’t alone. Private equity firms in the region are increasingly considering debt-related strategies as exit routes are clogged and many companies face debt payments they are unable to make.

In the past, stringent regulatory policies have prevented many infrastructure debt funds from being raised. The Securities and Exchange Board of India (SEBI) announced last month that it would give 47 fund managers the mandate to set up Alternative Investment Funds (AIFs) – a significant increase from the 12 alternative investment fund managers who were given the mandate to launch AIF funds last year.

For more on the Indian debt market, read the May edition of Private Debt Investor, Infrastructure Investor's sister publication.