MUMBAI : India’s sovereign-backed private investor National Investment and Infrastructure Fund Ltd. (NIIF) has raised ₹19,000 crore, or $2 billion, in the first close of its NIIF Infrastructure Fund II from large global and domestic institutional investors.

The firm is targeting $3.2 billion in total commitments and expects some of its marquee investors to allocate an additional $950 million towards co-investment opportunities, it said in a statement.

The capital will be deployed across core infrastructure sectors including energy, transport and digital infrastructure, while expanding into emerging themes such as urban infrastructure and electric mobility.

Broader mandate

“The strategy for fund two will remain the same. In addition to investing in sectors such as transportation, energy, and digital, we are looking at adding EV and urban sectors to the deployment plan for Fund 2” said Vinod Giri, managing partner, infrastructure at NIIF, in an interview with Mint.

“The opportunity set in India across sectors has scaled up in a very significant manner. We are looking at investing at least on the opportunity set just two and half times of what you have done investing into infrastructure over the last five to seven years,” he added.

Anchored by the government of India, the fund saw global investors such as AustralianSuper, CPP Investments, a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), Ontario Teachers' Pension Plan and Temasek come in as limited partners, or LPs.

Large domestic institutional investors such as ICICI Bank, HDFC Bank, Axis Bank, Kotak Life Insurance and HDFC Life Insurance have also committed capital to the fund.

Co-investment pool

Alongside the Fund, NIIF expects to mobilize approximately ₹9,000 crore ($950 million) in co-investment capital, enabling investors to participate at scale in select transactions, the firm said. Its first fund did not have co-investment built into it.

“The first close is with existing investors of Fund One. Majority of our existing investors are reupping their commitments. That's a big sign off on India infrastructure and the execution track record that NIIF has executed in originating the right transaction, managing and exiting it well. We are looking at a sizeable co-investment pool to be able to be exercised alongside the fund. So, this is India's largest infrastructure-focused fund,” Giri said.

The firm will soon start deploying from the second fund, having built a strong pipeline of opportunities it has lined up, said Giri.

Infrastructure Fund II builds on NIIF’s first infrastructure fund, which raised ₹16,000 crore ($2.34 billion) and has invested across renewables, transmission, distribution, battery storage, roads, ports and logistics, airports, data centres and smart metering. The first fund, says Giri, is “fully committed and significantly deployed.”

First fund track record

Through the first fund, the firm has invested in companies such as Hindustan Infralog Private Limited and Hindustan Ports Private Ltd through its operating partner DP World; in road platform Athaang, which is wholly owned by NIIF; in airports sector firms such as MOPA Airport and Alluri Sitarama Raju International Airport through its operating partner GMR Group; in data centre firm Digital Edge; in wireless solutions provider iBus Networks; its renewable energy platform Ayana Energy; smart metering platform IntelliSmart, among others.

The firm has also successfully exited its investments in Ayana and is in the last leg of a deal to sell its stake in IntelliSmart. Within its road platform, it has sold some of its select road assets too to deliver close to 50% DPI (distributed to paid-in capital), a key performance metric in private equity that measures the actual cash returned to investors against the investments received.

“We currently are at a DPI of close to 50%, and our DPI should improve once the smart metering transaction (exit) is consummated. So good exit track record as well,” Giri said.

“Publicly listed infrastructure InvITs are really emerging as a very attractive opportunity for investors like us to monetize our investments. And the way you see large commercial ReITs operating in the country, having a good track record on cash distribution and performance, I would see InvIT emerging as a very attractive asset class for investors like us.”

Including the infrastructure fund, NIIF manages more $7 billion in equity capital commitments across four strategies such as private markets, growth equity and climate investments.

MUMBAI : India’s sovereign-backed private investor National Investment and Infrastructure Fund Ltd. (NIIF) has raised ₹19,000 crore, or $2 billion, in the first close of its NIIF Infrastructure Fund II from large global and domestic institutional investors.

The firm is targeting $3.2 billion in total commitments and expects some of its marquee investors to allocate an additional $950 million towards co-investment opportunities, it said in a statement.

The capital will be deployed across core infrastructure sectors including energy, transport and digital infrastructure, while expanding into emerging themes such as urban infrastructure and electric mobility.

Broader mandate

“The strategy for fund two will remain the same. In addition to investing in sectors such as transportation, energy, and digital, we are looking at adding EV and urban sectors to the deployment plan for Fund 2” said Vinod Giri, managing partner, infrastructure at NIIF, in an interview with Mint.

“The opportunity set in India across sectors has scaled up in a very significant manner. We are looking at investing at least on the opportunity set just two and half times of what you have done investing into infrastructure over the last five to seven years,” he added.

Anchored by the government of India, the fund saw global investors such as AustralianSuper, CPP Investments, a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), Ontario Teachers' Pension Plan and Temasek come in as limited partners, or LPs.

Large domestic institutional investors such as ICICI Bank, HDFC Bank, Axis Bank, Kotak Life Insurance and HDFC Life Insurance have also committed capital to the fund.

Co-investment pool

Alongside the Fund, NIIF expects to mobilize approximately ₹9,000 crore ($950 million) in co-investment capital, enabling investors to participate at scale in select transactions, the firm said. Its first fund did not have co-investment built into it.

“The first close is with existing investors of Fund One. Majority of our existing investors are reupping their commitments. That's a big sign off on India infrastructure and the execution track record that NIIF has executed in originating the right transaction, managing and exiting it well. We are looking at a sizeable co-investment pool to be able to be exercised alongside the fund. So, this is India's largest infrastructure-focused fund,” Giri said.

The firm will soon start deploying from the second fund, having built a strong pipeline of opportunities it has lined up, said Giri.

Infrastructure Fund II builds on NIIF’s first infrastructure fund, which raised ₹16,000 crore ($2.34 billion) and has invested across renewables, transmission, distribution, battery storage, roads, ports and logistics, airports, data centres and smart metering. The first fund, says Giri, is “fully committed and significantly deployed.”

First fund track record

Through the first fund, the firm has invested in companies such as Hindustan Infralog Private Limited and Hindustan Ports Private Ltd through its operating partner DP World; in road platform Athaang, which is wholly owned by NIIF; in airports sector firms such as MOPA Airport and Alluri Sitarama Raju International Airport through its operating partner GMR Group; in data centre firm Digital Edge; in wireless solutions provider iBus Networks; its renewable energy platform Ayana Energy; smart metering platform IntelliSmart, among others.

The firm has also successfully exited its investments in Ayana and is in the last leg of a deal to sell its stake in IntelliSmart. Within its road platform, it has sold some of its select road assets too to deliver close to 50% DPI (distributed to paid-in capital), a key performance metric in private equity that measures the actual cash returned to investors against the investments received.

“We currently are at a DPI of close to 50%, and our DPI should improve once the smart metering transaction (exit) is consummated. So good exit track record as well,” Giri said.

“Publicly listed infrastructure InvITs are really emerging as a very attractive opportunity for investors like us to monetize our investments. And the way you see large commercial ReITs operating in the country, having a good track record on cash distribution and performance, I would see InvIT emerging as a very attractive asset class for investors like us.”

Including the infrastructure fund, NIIF manages more $7 billion in equity capital commitments across four strategies such as private markets, growth equity and climate investments.