IL&FS Infra Asset Management, a joint venture between IL&FS Financial Services and India's largest insurer, Life Insurance Corporation of India, has raised Rs 10,000 million (US$161 million) from five state-owned general insurance companies as part of its $5-billion infrastructure debt fund, IL&FS Infrastructure Debt Fund.Ramesh Bawa, managing director and chief executive officer of IL&FS Financial Services, said:
"General Insurance Corporation of India, New India, United, National and Oriental Insurance have entered into an agreement to purchase 2 per cent stake each. They will put up to Rs 1,500 crore and help us convince foreign pension funds and insurance companies."The firms are entering into an MoU with IL&FS Infra Asset Management to invest Rs 1,000 million each for two years.
The fund will be used for purchasing loans that banks and other financial institutions have given to companies to develop infrastructure projects.
The insurance companies have invested in the first such fund after the government first announced measures allowing insurance companies to invest in infrastructure funds in its budget for 2011-12.
Non-life insurance companies can invest up to 10 per cent of their investible corpus into infrastructure, as per national investment guidelines.
IL&FS Infra Asset Management said in december it had raised 750 crore (US$140 million) from five banks - Bank of India, Canara BankBSE , Indian Bank, Allahabad Bank and Oriental Bank of Commerce.
Hong Kong-based Hamon Group of Investments agreed to invest $25 million and has given IL&FS a commitment to raise $200 million for the fund.