IL&FS Financial Services informed that the infrastructure debt fund (IDF) floated by it in a joint venture with Life Insurance Corp of India (LIC) may collect up to $1 billion in the beginning.
It is learnt that the board of directors had initially advised raising $1 billion and then scaling up the size (even beyond $2 billion), based on requirements and performance. It may be recalled that, the IDF was set up with a targeted corpus of $2 billion.
IL&FS feels that there is adequate interest and it does not face challenge in raising money, especially from global investors.
Both the joint venture partners are awaiting final approval from the Securities and Exchange Board of India to start raising the amount.
The $1 billion, which may be raised from foreign and domestic investors, would be used for funding projects in power, ports, road, healthcare, education and other sectors.
The fund will use a trust structure (mutual fund route) for this venture, since it provides flexibility to invest in existing and new projects.
IL&FS plans to approach Japanese and Australian investors, including pension funds. The share of foreign money in the fund is expected to be 50-60 per cent.