Srei Infrastructure Finance, an Indian private sector infrastructure non-banking financial company, is targeting commitments for a $500 million India-focused infrastructure fund.
This is the first time Srei is approaching overseas investors for a fund, Sunil Kanoria, vice chairman Srei, told sister publication PEI Asia. Up until now, the firm has mostly provided debt, although it has raised about $120 million in equity from domestic investors for four smaller funds in the past. Those funds are all fully invested.
Srei’s new fund will primarily focus on power, roads, urban infrastructure and to a lesser extent on telecom infrastructure in rural India as it sees opportunities for growth in that sector. In the power segment, Srei’s focus will be on distribution and transmission as opposed to power generation, Kanoria said. This is because power distribution and transmission are in greater need of investments. In the power space, the fund will focus also focus on renewables to an extent, he added.
Referring to Srei’s move into infrastructure fund management, Kanoria said Srei has been playing a major role in infrastructure financing in India for the past 21 years. The company has a strong customer base and a strong understanding of the infrastructure sector in India.
“Until now, we were mostly providing debt though we have done a little bit of equity. With the experience we have gained, we feel we have the expertise to get higher returns through making equity investments,” Kanoria said, adding that the company understands the “ground-level” risks well.
Established in 1989, Srei is engaged in infrastructure equipment financing and provides solutions spanning project financing, project advisory and project development along all infrastructure segments. The company, which has a customer base of more than 15,000 and manages assets of almost $2 billion, has 63 offices in India and three in Russia.
Other Indian firms that have, in recent weeks, unveiled plans to raise infrastructure funds for India include ICICI Venture, which will target $500 million for its maiden infrastructure fund, and the infrastructure finance subsidiary of Larsen & Toubro, which will seek to raise $250 million in its maiden fundraising effort.
Separately, UK-based emerging markets specialist Ashmore Investment Management and PTC India, formerly known as the Power Trading Corporation of India, are targeting $750 million for a fund that will invest in energy projects across India.