State Bank of India (SBI) and Macquarie Capital Group Limited (Macquarie) announced today their intention to raise a new US$2 billion fund that will invest in direct infrastructure investment opportunities in India.

A Memorandum of Understanding was today signed by SBI and Macquarie to manage the proposed fund. The International Finance Corporation (IFC), as one of the fund’s cornerstone investors, will also have a stake in the proposed fund management company.

Macquarie, SBI and the IFC together plan to contribute a total US$450 million in anchor investments to start the fund, which will raise further capital from both domestic and international institutional investors.

The fund is scheduled to launch by the end of the second quarter of 2008.

As the primary sponsors of the fund, SBI and Macquarie will create a unique partnership for the sourcing and execution of direct equity investments in India’s infrastructure market, which is expected to experience exponential growth over the coming decades.

Macquarie and SBI’s joint deal origination capacity will be backed by their infrastructure-related experience and knowledge in the global and Indian markets respectively.

“Teaming Macquarie and its global experience with SBI in its home market, where its reputation and credentials are beyond compare, will create a powerful partnership in India,” said Mr Nick van Gelder, head of Macquarie Capital Funds in Asia.

He said Macquarie and SBI had already identified a strong pipeline of investment opportunities which were under assessment.

“SBI has been a leader in Indian banking for two hundred years and has more recently established itself as the leader in providing project finance to India’s infrastructure sector,” said Mr Deepak Chawla, Deputy Managing Director of Corporate Strategy and New Businesses at SBI. “We are delighted to combine these unsurpassed local strengths with Macquarie’s significant global experience in infrastructure investment.”

The fund intends to provide equity and equity-like capital for investments in traditional infrastructure, such as roads, ports, airports and power. It will also look at investment opportunities in infrastructure-related assets and businesses.

“The infrastructure opportunities in India are tremendous with India’s population expected to grow to almost 1.7 billion by 2050,” said Mr van Gelder. “Some 70 per cent of the Indian population is expected to fall within the working age bracket by 2025 and with disposable income levels increasing across India we anticipate a relentless demand for infrastructure in the coming decades.”

Mr Chawla added: “The Indian economy is expected to grow at 8-to-9 per cent for the coming few years and, with the rapid development of a legal and regulatory framework that facilitates investment in infrastructure, we expect the infrastructure spend of the country to reach US$1 trillion in the next decade.

“The unique combination of SBI and Macquarie, along with the IFC, will position the fund well to take advantage of these emerging opportunities and provide an unmatched value proposition to investors.”

Sourced From: Adfactors Public Relations Pvt Ltd

Tags: calls, daytrading, free calls, intraday, tips

Similar Posts:

• Axis PE achieves 1st close for its US$ 500mn Infra Fund
• Foreign investors return to India: Moody’s
• Infrastructure shares are hot commodities for MFs in India
• Kohlberg Kravis Roberts to invest in Bharti Infratel
• KIAL announce closure of Kotak India Growth Fund II