A Kotak Mahindra Bank arm on Tuesday announced it has raised Rs 5,328 crore to invest in infrastructure projects in the country.
Kotak Investment Advisors Ltd (KIAL) is targeting to raise Rs 6,000 crore in total for the Kotak Infrastructure Investment Fund, and this is the maiden close for the platform, according to a statement.
The fund will be focusing on infrastructure credit and this is the first time where a fund is being set up with significant commitments from global investors, the statement said.
Majority of the Rs 5,328 crore fund in commitment has been made by the Canadian Pension Plan Investment Board (CPPIB), while the Asian Infrastructure Investment Bank (AIIB) has pitched in with a USD 100 million (about Rs 828 crore) commitment.
The fund will be providing senior and secured credit, and will be attempting to deliver returns which will be higher than equity to its investors by measuring and pricing risks better, the fund's Chief Executive Suman Saha said, adding that it will provide credit solutions to stressed infrastructure assets, as well as capital for growth.
"Infrastructure is the backbone for an economy and is the key to the government's plan to make India a USD 5 trillion economy by 2025. This fund will play a key role in solving the balance sheet correction issues in infrastructure assets at a time when other sources of capital have dried up," KIAL's Managing Director Srini Sriniwasan said.
AIIB's Director General in the banking department Dongik Lee said India's infrastructure sector has many assets with operating track records in need of innovative credit solutions. The sectoral expertise of KIAL and Kotak Group's strengths, KIIF is expected to be a vital new source of liquidity which complements the conventional capital available in the sector.