Axis Private Equity, the private equity arm of India’s Axis Bank, says its infrastructure fund has held a first close on 6 billion rupees ($148 million, €95 million) for its India infrastructure fund.
The bank, formerly known as UTI, said in a statement it has already committed more than half of the fund, and it would focus on companies that build transport, irrigation, energy networks and hotel developers. It said the money was raised within five to six months from its launch, and that the fund is targeting an end goal of $600 million.
The firm first indicated its interest in such a fund last year when it registered a domestic fund with the Securities Exchange Board of India. It has also reportedly registered a fund in Mauritius to take advantage of tax benefits.
In January, Axs CEO told India’s Business Standard that the entire fund would be raised in the following 4-6 weeks. The amount closed on falls far short of that target. The Axis Infrastructure Fund started with an anchor investment of Rs200 crore ($50 million) from the bank itself.
The government of India estimates that investment in infrastructure will need to increase from 3.5 percent of GDP at present to 8 percent of GDP by 2012, and anticipates that around $450 billion of infrastructure investment will be required in India by 2012. Axis’s vehicle is one among many infrastructure funds that have been launched in India over the past two years. In March, Mumbai-based investment firm Quantum Equity Advisors launched a $500 million infrastructure fund. In February, Kotak Investment Advisors launched a $1 billion fund for Indian infrastructure. And in February of last year The Blackstone Group teamed up with Citigroup and India’s Infrastructure Development Finance Company to form a $5 billion Indian infrastructure fund.