IDFC plans India’s first Infrastructure Debt Fund through mutual fund route

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IDFC  plans to launch India’s  first infrastructure debt fund through MF route and  filed an offer document with SEBI  .

The framework for establishment of Infrastructure Debt Funds (IDFs) was announced by the   Finance Minister in the   Union budget 2011  wherein IDFs were allowed to be set up either structured as an NBFC or as a mutual fund. IDFC MF  have done the filing  with SEBI through the MF route. IDFs are a novel attempt to address the issue of sourcing long term debt for infrastructure projects.  

IDFC Infrastructure Debt Fund   shall have a minimum tenor of five years and not

greater than 15 years from the date of allotment of Units.  The investment objective of the Scheme is to seek to generate income and capital appreciation by investing primarily in a portfolio of infrastructure debt instruments. The corpus   under the IDF will be invested in debt securities,   bank loan and securitized debt instruments  

Dr. Rajiv Lall , MD & CEO , IDFC said “ Investors are looking at fixed income products which can offer superior returns , IDF would offer investors a debt product with superior return  . Through the IDF, we would be able to create an instrument which allows capital markets to invest in Infrastructure debt , thereby freeing balance sheets of banksand allowing intermediation of funds in the Infrastructure sector .

 “People are looking for products that offer superior returns, .without volatility associated with equity markets.  Infra debt which is very diff from volatile infra equity has ability to offer superior return with safety. Large number of HNIs would be potential investor in a debt fund”. IDF would offer stable returns for long term making it better product than fixed deposits “he added.

About Infrastructure Development Finance Company

IDFC was established in 1997 as a private sector enterprise by a consortium of public and private investors. Its expertise in the infrastructure sector and strong relationships with government and infrastructure sponsors provides it with a platform for facilitating private investment and public-private partnerships in infrastructure projects in sectors where market structures, government policy and regulation are evolving.

The mission is to be the financier and advisor of choice for infrastructure projects in India. IDFC is focused on enhancing shareholder value through pursuing strategies that enhance its profitability, return on assets and return on equity.

Today IDFC is already the single largest debt & equity financier of privately sponsored infrastructure in the country having a balance sheet of US$ 10.7 billion.

Going forward, our business strategy is to be “India’s Specialist Infrastructure Institution” with an infrastructure focused project finance, investment banking and asset management franchise.