Axis Private Equity, the PE arm of Axis Bank, has raised a Rs 600-crore infrastructure fund. IDFC Private Equity, another major, had on Tuesday announced its intention to raise a $700-million fund for the sector. According to sources familiar with the matter, Axis Private Equity is already in the process of finalising four deals related to the infrastructure sector.
“Of its targeted corpus of Rs 2,000 crore, Axis PE has closed its first fund — Axis Infrastructure Fund 1 — by raising Rs 600 crore,” said a person involved in the development. The PE has already identified four investment targets, he added. When contacted, Axis PE chief executive officer and MD Alok Gupta declined to comment.
Axis PE raised Rs 600 crore within a period of five to six months from its launch, the tight liquidity conditions notwithstanding. Apart from pension funds, investors in the fund also include sophisticated domestic and international banks and corporates. The Axis Infrastructure Fund has an anchor investment of Rs 200 crore from Axis Bank — the erstwhile UTI Bank — while the rest is being raised from outside.
Axis Infrastructure Fund will participate in infrastructure-enabling companies through equity investments in the range of $15 million to $30 million. Axis PE has already committed more than half the amount raised in infrastructure and infrastructure-enabling companies, industry sources said.
The firm had, last year, registered a domestic fund with Sebi. It has also registered a fund in Mauritius to take advantage of tax benefits. Financial services majors like JPMorgan, Citigroup, ICICI Ventures and ICICI Bank have also recently announced plans to start infrastructure funds. Recently, IL&FS raised $500 million to invest in the infrastructure sector.
The government estimates that Indian infrastructure will need about $500 billion to build facilities like new roads, ports, airports and power plants by 2012.
It is estimated that in the first three months of 2008, the real estate and infrastructure sector accounted for 28% share of all private equity investments in India at $1.12 billion, followed by the power sector which received about 13% share of the pie at $520 million. Banking, finance and telecom sectors were tied for the third most favourable sectors with 8.7% of the deals at more than $340 million each.
Source: Economic Times