ICICI Mulls $2 Billion Infrastructure Fund

ICICI Bank is all set for setting up a $2 billion infrastructure fund. The fund will be managed by the bank and not by ICICI Ventures. This will be the largest infrastructure fund by an Indian entity to hit the market. Credit Suisse, which is helping ICICI Bank raise the funds, is in the process of tapping global investors. Roadshows have kicked off and the bank has already spoken to many global investors. It has received soft commitments for around $500 million, according to sources. Depending on the interest in the fund, the bank may also expand the size to above $2 billion. For the infrastructure fund, ICICI Bank will create a separate entity, in which it is likely to contribute around 15-20% of the funds. It is currently in the process of setting up the structure of the fund, which will invest in roads, ports, power, SEZs and other infrastructure-related activities.

ICICI is looking at overseas investors with long-term commitments of above seven years. Citigroup, Blackstone and 3i across the globe and Axis Bank in India have also launched similar infrastructure funds. Axis Private Equity is raising $500 million, for which it has already received soft commitments of $150 million from domestic and international investors. The fund has already made one investment and is evaluating opportunities worth $100 million. The fund will look at investments in energy, transportation, ports, healthcare, hotels, pipeline and roads.

The Axis venture will be looking at investments with a ticket size of $20-50 million and is looking at a 10-year commitment from investors, five years for investments and another five for divestments. Axis Bank will contribute around 10-15% of the fund.