IIFCL Mutual Fund is working towards setting up its second infrastructure debt fund (IDF), SB Nayar, Chairman and Managing Director, IIFCL, said. This fund would be on a much larger scale than the one launched in June last year, Nayar told BusinessLine in the capital. The first IDF scheme launched by IIFCL Mutual Fund saw as much as ₹300 crore mopped up from banks and financial institutions. Unlike the first fund where there was no foreign investor interest, things could be different this time round, according to Nayar.

“Now the scenario is different. There is more positivity. Foreign investors are interested in sectors like clean energy. We are examining the options,” Nayar said.

Plans are afoot to make foreign investors participate in the new fund, he added. Nayar said the entire ₹300 crore mobilised from banks and financial institutions for the first IDF scheme has been fully invested. The funds have been mainly invested in power, road and water projects.

IDF concept

The concept of IDF was launched in India with lot of fanfare during the erstwhile UPA-II rergime. But this vehicle has really not taken off so far. Part of the reason is, banks are not keen to invest more as many had already reached the sectoral cap for infrastructure.

Also, given the high rupee hedging costs, overseas investors have been reluctant to park money in IDFs in India.

Related Topics