India's SREI in market with infrastructure fund

One of the few Indian companies raising an infrastructure fund that is not a banking conglomerate said it was aiming to raise hundreds of millions of dollars to invest in the sector.

Indian company SREI Infrastructure Finance is in the process of establishing a private equity-style fund and is aiming to raise ‘hundreds of millions of dollars’.

Joint managing director Saud Siddique said in an interview with Business Line that the money raised would help finance medium-sized projects across the country. He added that the firm is actively talking with potential investors and is closing in on a $100 million credit line from three lenders to invest in the sector.  

The 20-year-old company is one of the few Indian companies interested in infrastructure that did not start out life as a banking institution. It was established in 1989 to finance construction equipment but has since branched out into insurance and capital markets services, which helps it raise funds in-house.

Subsidiary SREI Venture Capital manages a series of funds that invest in private equity, venture capital and mezzanine deals in India with a main focus on infrastructure.

Last month, Indian broker Kotak Securities said performance at the whole group level was “materially above expectations”, adding it maintained a positive outlook for SREI given the “improved macroeconomic scenario”.

During an investor call in June, chairman and managing director, Hemant Kanoria, said there was a lot of enthusiasm from the Indian government for infrastructure and that the government felt it had the “right ministers” in place to progress projects in areas such as roads, power plants and ports.

“The government is quite sanguine that it will announce a large number of projects in this particular year and, moving forwards, for the next five years,” he told analysts.

A number of organisations are turning their attention to infrastructure in India. In two of the most recent announcements, housing group DHFL said it was looking to raise a $200m, while money manager UTI said it was looking for $500 million.

SREI wasn't immediately available for comment.