Current Affairs Economy

The Finance Ministry of India is in talks of setting up a strategic investment fund under NIIF

As per reports, the finance ministry has conducted advanced discussions for starting a fund under the National Investment and Infrastructure Fund (NIIF) that would specifically target strategic investments.

Earlier this year, by launching a platform for investing almost USD 3 billion in ports and logistics, the NIIF managed to give a much-needed boost for its funding activity which it started along with the global operator of marine and inland terminals DP World.

A top-level finance ministry went on to state, “We are now discussing a fund in NIIF which is more for the strategic investment.”

When the official was questioned about when would the fund be launched, he said that “discussions with investors are at an advanced stage and the project can be expected to be up and running very soon.”

In order to fund projects that are worth a staggering Rs 16,000 crore for the current fiscal, the NIIF has planned to raise Rs 8,000 crore for several sources.

The official also revealed that in order to provide additional support to the NIIF that plans to raise Rs 8,000 crore from various strategic anchor partners, particularly multilateral and bilateral institutions, sovereign wealth funds, pension funds and domestic public sector enterprises, the government of India has already announced the allocation of Rs 1,000 crore budgetary.

It is also quite significant  to note that the very first close of the NIIF Master Fund was conducted on October, 16, 2017 which received contributions from a subsidiary of Abu Dhabi Investment Authority (ADIA) and as many as four Domestic Institutional Investors (DIIs), namely ICICI Bank(NSE -0.69 {27c26ef558c28c964c96a6821835eda56a0f914c6657a8b819ac8be921972988}), Kotak Mahindra(NSE 1.60 {27c26ef558c28c964c96a6821835eda56a0f914c6657a8b819ac8be921972988}) Life, Axis Bank and HDFC Group.

Also, An India-UK Green Growth Equity Fund (GGEF) is set to be launched that would be backed by the fund of funds vertical of NIIF. To further support the project it will receive anchor commitments of GBP 120 million from both the Government of India through NIIF as well as the government of UK.

By establishing three Alternative Investment Funds (AIFs) under the Sebi Regulations, all the operations of the NIIF would start functioning. The proposed corpus of NIIF is estimated to be Rs 40,000 crore (around USD 6 billion).

49 percent of the total commitment towards the AIFs under the NIIF scheme would be the contribution of the Government of India.

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