In a change of tack, IIFCL has decided to float a $1-billion infrastructure debt fund (IDF) through the mutual fund route instead of the non-banking finance company (NBFC) route.
In July, the State-owned company had said that it would set up a Rs 5,000-crore IDF through the NBFC route.
While 50 per cent of the $1 billion would be funded by foreign institutions, the rest would come from domestic institutions. “We have already finalised the domestic institutions — LIC (10 per cent of corpus) and IDBI Bank (14 per cent). We have also got tentative approval from ADB (25 per cent) and HSBC (25 per cent) who are likely to be the foreign institutions,” Mr Goel said.
IIFCL, as a sponsor, would bring in 26 per cent, Mr Goel said, adding that he expected the IDF to be launched before the end of February 2012. He said IIFCL had decided to opt for the mutual fund route instead of the NBFC route, as it found the SEBI guidelines to be more flexible.
“The proposed $1 billion is only the initial corpus. It would be expanded as we move along. Simply having one or two partners will not give a sizeable corpus in the long run. Having five contributors means risk is shared and there is scope to expand the corpus,” he said when asked why IIFCL was looking at five sponsors.
The Finance Ministry had in June this year come out with guidelines allowing IDFs to be set up either as trusts or as companies. While the trust-based IDFs are to be regulated by SEBI, those set up as NBFC would come under the RBI's ambit, the Finance Ministry had said.