Khaleej Finance and Investment (KFI) says its Indian Private Equity Fund has attracted interest from institutional as well as individual investors, both regionally and internationally.
Khaleej Finance and Investment (KFI) says its Indian Private Equity Fund has attracted interest from institutional as well as individual investors, both regionally and internationally. India’s second largest bank, ICICI Bank Limited, has been named financing partner for the fund.
KFI’s ‘Indian Private Equity Fund’ was arranged in cooperation with a leading Indian semi governmental institution and was underwritten by another investment company.
Talal Kaiksow, Director of Wealth Management at KFI, noted that the Sharia Compliant USD 200 million fund offers investors in the GCC an opportunity to benefit from the dynamism of the Indian economy and the high growth levels it is maintaining.
KFI’s interest in India began as part of a study initiated by the Research Department. The study looked into various global markets and conducted a comprehensive analysis of the Indian as well as other Asian markets. The results highlighted India’s potential in terms of its investment opportunities and further growth potential. A resulting foreign direct investment initiative was taken along with a consortium of KFI’s shareholding institutions in the Indian market. Subsequent to this, the Indian Private Equity Fund was structured to allow for KFI’s investors’ entrance in the Indian private equity market.
Aiming at reinforcing the performance of the fund, KFI signed agreements with ICICI Bank Limited, India’s second largest bank with a network of approximately 680 branches and extension counters all over the country. This arrangement nominated ICICI Bank limited as a financing partner for the fund, ICICI Securities Ltd- a subsidiary of ICICI Bank, as its private equity advisor, and ICICI Home Finance Company Ltd – another ICICI Bank subsidiary – as its real estate advisor.
Khaleej Finance and Investment is the Arranger, Lead Manager, Co- Promoter, and Co- Placement Agent of the ‘Indian Private Equity Fund’, which witnessed an extension of its placement period upon the request of the underwriters. The Fund offered a diverse range of investment opportunities in various emerging sectors that are witnessing fast growth and that provided beneficial investment options for investors in the GCC.
The ‘Indian Private Equity Fund’ is a USD 200 million offering allocated to two main portfolios: 50 percent real estate and development and 50 percent private equity. The minimum subscriptions were USD 250,000 for individuals and USD 1 million for institutions with a target Internal Rate of Return (IRR) in excess of 25 percent.
The fund will invest in the following sectors: sugar, iron and steel, cement, pharmaceutical and biotech, information technology and telecommunications. These sectors were chosen because of their fast growth levels that are expected to be maintained in the coming years.
The Indian economy is the fourth largest in the world and Direct Foreign Investments in the country have increased tenfold, reaching a record high of USD 7.59 billion in 2003 from a figure of USD 793 million in the early nineties.
‘The real estate and real estate development sectors in India are attracting the biggest Indian and international companies. Economic observers expect the demand in real estate development projects to reach 63 million square feet in 2009. Consequently, India will invest up to USD 190 billion on infrastructure development projects in the coming five years, from which 34 percent will be spent on energy production and distribution projects , 29 percent on road development, and the rest on water distribution, ports, railroads, transportation and airports’ , said Talal Kaiksow, Director of Wealth Management at KFI.
Moreover, the Indian industry today is competing with China to cater to the world’s demands. The level of exports is expected to have a robust growth of about 40 percent, reaching USD 140 billion by the end of 2007.
