National Investment and Infrastructure Fund (NIIF), India’s first sovereign wealth fund announced that it has acquired IDFC Infrastructure Finance (IDFC-IFL), an infrastructure debt fund.
This acquisition is the first investment from NIIF’s strategic fund. The acquisition is subject to approval from RBI and customary closing conditions.
The company has a loan book of more than Rs 4,500 crore, strong asset quality and no material repayment obligations for the next two years, NIIF said in a statement on Wednesday.
“Building on this acquisition will allow NIIF to play a meaningful role in the private debt space in Indian infrastructure, where we see a growing need given India’s infrastructure ambition, an emerging gap as traditional infrastructure lenders consolidate and the potential for attractive returns,” said Sujoy Bose, managing director and chief executive at NIIF.
“The long-term nature of NIIF’s Strategic Fund, its strong governance and underwriting standards, combined with NIIF’s ability to attract capital will allow us to build on a strong platform created by IDFC and to continue to grow the business,” he said.
This investment demonstrates the ability of NIIF to make commercially attractive counter-cyclical investments since it comes at a time when non-banking financial companies (NBFCs) are facing some temporary headwinds, he added.
The Indian government has established three funds under NIIF. The Strategic Fund will acquire equity or equity-linked projects and focus on greenfield and brownfield projects in core infrastructure sectors. The government owns 49 percent stake in the fund.
NIIF’s mandate includes investing in areas such as energy, transportation, housing, water, waste management and other infrastructure-related sectors in India.
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