Company:National Investment and Infrastructure Fund

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Short description: Sovereign wealth fund of India dedicated to infrastructure
National Investment and Infrastructure Fund Limited
Typepublic sector company
IndustryInstitutional Investor, Fund Management
FoundedFebruary 2015; 9 years ago (2015-02)
HeadquartersMumbai, India
Area served
India
Key people
Sujoy Bose, CEO
Total assets₹ 35,000 crore (US$4.3 billion)
Websiteniifindia.in

National Investment and Infrastructure Fund Limited (NIIFL) is an Government owned company which maintains infrastructure investments funds for international and Indian investors anchored by the Government of India. The objective behind creating this organisation was to catalyse capital into the country and support its growth needs across sectors of importance.[1][2][3]

In Union Budget 2015-16, India’s then Finance Minister, Arun Jaitley announced the creation of NIIFL. It was proposed to be established as an Alternative Investment Fund with an inflow of ₹20,000 crore from the Government of India, with their commitment being 49% of the total corpus.[4] NIIFL was approved in August 2015 by the Department of Economic Affairs. First meeting of its governing council was held in December 2015 further to which it was registered with SEBI as Category II Alternative Investment Fund.[5] In June 2016, Finance Ministry announced that they appointed Sujoy Bose as Chief Executive Office of NIIFL who was then the Director and Global Co-Head, Infrastructure and Natural Resources International Finance Corporation (IFC).[6]

As of September 2020, the NIIFL manages funds of over USD$4.34 billion.[7][8]

History

The Government of India founded the National Investment and Infrastructure Fund Limited (NIIFL) in February 2015 as a sovereign-anchored fund.[9][10] Its creation was announced in the Union Budget of 2015-16 by the then Finance Minister Arun Jaitley.[11][12][13] In October 2016, Sujoy Bose was appointed as the Managing Director and CEO of NIIF.[14][15] In December 2020, NIIFL achieved the final close of its infrastructure Fund, NIIF Master Fund USD 2.34 billion.[16]

Leadership

The Governing Council of the National Investment and Infrastructure Fund (NIIF) is chaired by the Hon’ble Finance Minister of India and has members from corporate bodies, investments and policy sectors. The Governing Council meets once a year and provides suggestions of the overall strategic decisions of the NIIFL. The Governing Council is currently chaired by Hon’ble Finance Minister of India Nirmala Sitharaman, Finance Minister of India.[17] Among the other council members are Debasish Panda (Secretary of Financial Services), Ajay Seth (Secretary, Department of Economic Affairs), Dinesh Khara (Chairman, State Bank of India), Hemendra Kothari (Chairman, DSP Group), T. V. Mohandas Pai (Chairman, Manipal Global Education).

NIIFL’s Board of Directors establishes and reviews the business strategy that guides the business affairs of the organization. It is composed of shareholder representatives and/or nominees and independent directors. Sujoy Bose is the Managing Director and CEO of the organization. Erstwhile Managing Director – India of Temasek, Padmanabh Sinha is the Executive Director and CIO – Growth Equity, managing the Strategic Opportunities Fund. Prakash Rao is the Executive Director and CIO for Indirect Investments, a financial services veteran with over three decades of experience. He is also one of the founding members of NIIF. Ambalika Banerji is the Executive Director – Direct Investments.[18]

Funds

NIIF manages three funds: Master Fund, Fund of Funds and Strategic Fund. The funds were set up to make investments in India by raising capital from domestic and international institutional investors.

Master Fund

The Master Fund is an infrastructure fund with the objective of primarily investing in operating assets in the core infrastructure sectors such as roads, ports, airports, power etc.[19] The Fund made its final close in December 2020, achieving a size of INR equivalent of USD 2.34 billion, exceeding its target of USD 2.1 billion.[20]

Fund of Funds

The Fund of Funds anchor and/or invest in funds managed by fund managers who have good track records of delivering returns to investors. The Fund invests in several sectors including green energy, social infrastructure, mid-income and affordable housing, technology, and others.[21][22]

Strategic Opportunities Fund

Strategic Opportunities Fund invests in growth equity and provides long-term capital to strategic and growth-oriented sectors in the country with the aim to build domestic leaders.[23][24][25]

Investors in the Fund

The government of India has anchored the NIIFL funds and is a 49% investor in each of the funds managed by NIIFL.[26]

NIIF Master Fund announced its final close in December 2020 at USD 2.34 billion. Its investors include the Government of India, Abu Dhabi Investment Authority (ADIA), Temasek, Ontario Teachers’ Pension Plan, AustralianSuper, CPP Investments, PSP Investments, US International Development Finance Corporation, and domestic institutional investors including HDFC Group, ICICI Bank, Kotak Mahindra Life, and Axis Bank.[27]

NIIF Fund of Funds is a USD 600 million fund with investors including the Government of India, the Asian Infrastructure Investment Bank, the Asian Development Bank, and the New Development Bank.[28]  

Investments

NIIF Master Fund

In February 2018, Master Fund created its first platform along with DP World to invest in the ports and logistics sector in India.[29] Together, NIIF and DP world announced the investment of $3 billion in the platform.[30] In March 2018, Hindustan Infralog, the joint venture platform between DP World and the NIIF announced that it bought 90% stake in the logistics firm Continental Warehousing.[31] In June 2022, NIIF expanded its partnership with DP World through an investment of around INR 2,250 crore (approximately USD 300 million) to acquire 22.5% in Hindustan Ports Pvt Ltd (HPPL). Hindustan Ports is a wholly-owned subsidiary of DP World. The transaction is under customary completion conditions and is expected to be closed by Q1 CY2023.[32]

In February 2019, Master Fund announced a partnership with BII (formerly known as CDC Group) and EverSource Capital (a joint venture between Everstone Capital and Lightsource BP) to cumulatively invest USD 300 million in Ayana Renewable Power, the renewable energy platform founded by BII. In December 2020, all three investors injected further capital into the platform. Following this, Master Fund became the majority shareholder in the company.[33] In January 2022, Ayana Renewable Power announced that its portfolio has crossed 1 GWac of operational renewable energy capacity.[34]

In October 2019, Master Fund and Energy Efficiency Services Limited (EESL) announced the creation of a joint venture, IntelliSmart Infrastructure Private Limited, to implement, finance and operate the smart meter roll-out program of power distribution companies.[35][36]

In November 2020, NIIF announced the acquisition of Essel Devanahalli Tollway (22 km six lane toll road in the state of Karnataka) and Essel Dichpally Tollway (60 km four lane toll road in the state of Telangana) through the Master Fund. These roads are managed by Athaang Infrastructure, NIIF’s proprietary roads platform. In 2022, NIIF announced the acquisition of another two roads in Jammu & Kashmir to be managed by Athaang Infrastructure - Navayuga Quazigund Expressway Private Limited and SP Jammu Udhampur Highway Limited.[37]

NIIF Fund of Funds

In April 2018, NIIF partnered with the UK government to launch the Green Growth Equity Fund (GGEF) under its Fund of Funds to invest in renewable energy, clean transportation, water and waste management, and other related sectors in India.[38]

NIIF Fund of Funds and the UK Government committed GBP 120 million each into the Fund. GGEF announced its final close in January 2022 at USD 741 million, making it one of the largest single-country funds focused on climate change in emerging markets.[39]

In October 2018, NIIF Fund of Funds invested INR 660 crore in HDFC Capital Affordable Real Estate – 2 (H-CARE 2), an investment platform, managed by HDFC Capital Advisors, a wholly-owned subsidiary of HDFC Ltd.[40]  

In October 2020, NIIF Funds of Funds committed to Somerset Indus Healthcare India Fund, an affordable healthcare fund.[41]

In April 2022, NIIF Fund of Funds made its first commitment to a venture fund, YourNest Innovative Products VC Fund III. It made a USD 15 million commitment and was the anchor investor in the Fund.[42]

NIIF Fund of Funds has also invested in Multiples Private Equity Fund III managed by Multiples Alternate Asset Management Pvt. Limited focusing on the mid-market space and in Arpwood Partners Fund I, which focuses on the mid-market buyout/control segment.[43]

NIIF Strategic Opportunities Fund

In October 2018, NIIF announced the acquisition of IDFC Infrastructure Finance Limited (IDFC-IFL), a Non- Banking Finance Company registered with the Reserve Bank of India as an Infrastructure Debt Fund. This acquisition was made by NIIF’s Strategic Opportunities Fund. The Fund incubated Aseem Infrastructure Finance Limited (AIFL) in 2020, an Infrastructure Financing Company that can lend across the project life cycle. As of FY22, the two entities had jointly disbursed over INR 10,000 crores.[44]

On 22 November 2020, the Union Cabinet approved ₹6,000 crore investment by the Government of India into Aseem Infrastructure Finance Limited and NIIF Infrastructure Finance Limited as part of Atmanirbhar Bharat.[45] Additionally, in 2022, Sumitomo Mitsui Banking Corporation (SMBC), a Japanese Bank also invested in AIFL.[46]

In April 2021, the Strategic Opportunities Fund invested INR 2,100 crore in Manipal Hospitals, one of India’s largest multi-speciality healthcare providers. The Strategic Opportunities Fund made its next investment in May 2022 in Ather Energy, an electric two-wheeler company. This was its first direct investment in the manufacturing sector and in electric mobility, both areas of national importance given India’s green mission and decarbonisation goals.[47]

References

  1. ↑ "Budget 2020: Tax exemption for sovereign funds to boost India infra play". The Economic Times. https://economictimes.indiatimes.com/news/economy/infrastructure/budget-2020-tax-exemption-for-sovereign-funds-to-boost-india-infra-play/articleshow/73839614.cms?from=mdr. 
  2. ↑ "Modi's ambitious India infrastructure fund gets another boost; to jointly invest $3 billion with Dubai's DP World" (in en-US). The Financial Express. 2018-01-22. https://www.financialexpress.com/infrastructure/modis-ambitious-india-infrastructure-fund-gets-another-boost-to-jointly-invest-3-billion-with-dubais-dp-world/1024974/. 
  3. ↑ "NIIF to sign first investment proposal in next few days: CEO". Live Mint. 2018-01-17. https://www.livemint.com/Money/2CKhI1veyiR1OS2hWLYeAK/NIIF-to-sign-first-investment-proposal-in-next-few-days-CEO.html. 
  4. ↑ "NIIF: An untrodden path that holds promise" (in en-US). The Financial Express. 2016-01-20. https://www.financialexpress.com/industry/national-investment-and-infrastructure-fund-an-untrodden-path-that-holds-promise/198384/. 
  5. ↑ "The NIIF's tough challenge" (in en-US). The Financial Express. 2016-02-08. https://www.financialexpress.com/opinion/the-niifs-tough-challenge/208574/. 
  6. ↑ Tiwari, Dheeraj (2016-06-27). "Sujoy Bose appointed as new CEO of NIIF". The Economic Times. https://economictimes.indiatimes.com/news/economy/policy/sujoy-bose-appointed-as-new-ceo-of-niif/articleshow/52941898.cms. 
  7. ↑ "Five years on, National Investment and Infrastructure Fund (NIIF) yet to hit target" (in en). https://www.financialexpress.com/economy/five-years-on-national-investment-and-infrastructure-fund-niif-yet-to-hit-target/2069958/. 
  8. ↑ "NIIF inks $400 mn agreement with Singapore's Temasek". 6 September 2018. https://economictimes.indiatimes.com/news/economy/finance/niif-inks-400-mn-agreement-with-singapores-temasek/articleshow/65710868.cms. 
  9. ↑ "NIIFL to invest Rs 3,036 crore in J&K tunnel road Navayuga Quazigund Expressway" (in en). 2022-07-18. https://www.cnbctv18.com/business/companies/niifl-to-invest-rs-3036-crore-in-jk-tunnel-road-navayuga-quazigund-expressway-14167512.htm. 
  10. ↑ Kalyanaraman, Anand (2019-02-25). "All you wanted to know about...NIIF" (in en). https://www.thehindubusinessline.com/opinion/columns/slate/all-you-wanted-to-know-about-niif/article26367277.ece. 
  11. ↑ "Union Budget 2015: Full text of finance minister's speech" (in en). 2015-02-28. https://www.livemint.com/Politics/GIkYvubNVzBM2lsrW5pKjM/Union-Budget-2015-Full-text-of-finance-minister-Arun-Jaitle.html. 
  12. ↑ Singh, Sarita C.. "Union Budget 2015: Government to set up Rs 20,000 crore infrastructure fund, auction projects with clearances". The Economic Times. https://economictimes.indiatimes.com/news/economy/infrastructure/union-budget-2015-government-to-set-up-rs-20000-crore-infrastructure-fund-auction-projects-with-clearances/articleshow/46408448.cms?from=mdr. 
  13. ↑ "Budget 2016: Five-pronged strategy to boost public investment in infrastructure" (in en). 2016-03-01. https://indianexpress.com/article/india/india-news-india/union-budget-2016-five-pronged-strategy-to-boost-public-investment/. 
  14. ↑ Tiwari, Dheeraj. "Sujoy Bose appointed as new CEO of NIIF". The Economic Times. https://economictimes.indiatimes.com/news/economy/policy/sujoy-bose-appointed-as-new-ceo-of-niif/articleshow/52941898.cms?from=mdr. 
  15. ↑ Nair, Remya (2016-06-27). "Sujoy Bose appointed as CEO of NIIF" (in en). https://www.livemint.com/Politics/IzsS9tAiRivZUr95J2A1XI/Sujoy-Bose-appointed-as-CEO-of-NIIF.html. 
  16. ↑ "NIIF infuses $300 mn in UAE-based DP World's unit Hindustan Ports" (in en-US). https://www.vccircle.com/niif-infuses-300-mn-in-uae-based-dp-world-s-unit-hindustan-ports. 
  17. ↑ Seth, Dilasha (2022-09-07). "Growth, jobs, equitable wealth distribution top priorities for govt: Sitharaman" (in en). https://www.livemint.com/economy/growth-jobs-equitable-wealth-distribution-top-priorities-for-govt-sitharaman-11662545639791.html. 
  18. ↑ "Infrastructure and Private Equity Investment Council Members". https://www.niifindia.in/about. 
  19. ↑ "NIIF plans $5 bn master fund to oil infrastructure sector wheel" (in en-US). The Financial Express. 2017-09-07. https://www.financialexpress.com/industry/niif-plans-5-bn-master-fund-to-oil-infrastructure-sector-wheel/844291/. 
  20. ↑ "NIIF Master Fund Closes at 2.34 Billion". https://hcisingapore.gov.in/pages?id=eyJpdiI6IkxBOTRpeklsVWFCWlwveFZmOWdMVVZRPT0iLCJ2YWx1ZSI6IlVibmJodGx0cmZWcDU2V2NJU1wvN1pRPT0iLCJtYWMiOiJjZTVkNjZiNGYyZmU2ODI4Y2NmMGNhYmYxZDkyOGE3OTUyNTBkNTZlMjg3ZmIzOTYzYWYwMjk3NmJmY2MzNDU2In0=&subid=eyJpdiI6Im5DdXNzbzJ0bHd1WmxPOFBkVFJVZGc9PSIsInZhbHVlIjoid0k4ODZcL2RkOFFQVm50Q2IxOFpnY3c9PSIsIm1hYyI6IjBmYjYxNjcxMWZiNmIyYmUyYjRjNjQ4OWYyNWFkMjE3MDhjMWJmYjZjMTJhMGE2YmQ0MTUyYzkyNTBjZGIxMzQifQ==&nextid=eyJpdiI6IlB5RUtoM0h4Tk9wMzJ0c0hmWHkwOFE9PSIsInZhbHVlIjoiOEk0SWFkR2ZOVmk0RFAzc3ZLWVJ2Zz09IiwibWFjIjoiYzAyMTMxMjYxZTdmZmE0NWMxMTJjYzk2NzdhNmUxYzdiNGI5M2Q3MDc1MTZlZTY2MTcxMzI2NTAzMmMwOTRjOCJ9. 
  21. ↑ IANS (2018-06-25). "AIIB to invest $100 mn for India's development projects". Business Standard India. https://www.business-standard.com/article/news-ians/aiib-to-invest-100-mn-for-india-s-development-projects-118062500560_1.html. 
  22. ↑ "NIIF to launch $2b fund to finance projects | News | Institutional Real Estate, Inc." (in en-US). Institutional Real Estate, Inc.. https://irei.com/news/niif-launch-2b-fund-finance-projects/. 
  23. ↑ "NIIF raises over half of its $2 bn PE fund" (in en-US). https://www.vccircle.com/niif-raises-over-half-of-its-2-bn-pe-fund. 
  24. ↑ "NIIF makes equity investment of Rs 4,689 crore in 5 years". The Economic Times. https://economictimes.indiatimes.com/markets/stocks/news/niif-makes-equity-investment-of-less-than-rs-4689-crore-in-5-years/articleshow/80433702.cms?from=mdr. 
  25. ↑ "Extract from Press information bureau", 03-August-2018
  26. ↑ "A $4 billion India fund is clashing with Its government backer" (in en). mint. 23 December 2022. https://www.livemint.com/market/stock-market-news/a-4-billion-india-fund-is-clashing-with-its-government-backer-11671757676283.html. 
  27. ↑ "Canada's PSP, US' DFC, Axis Bank invest USD 107 million in NIIF's master fund". The Economic Times. https://economictimes.indiatimes.com/industry/banking/finance/canadas-psp-us-dfc-axis-bank-invest-usd-107-million-in-niifs-master-fund/articleshow/79838879.cms. 
  28. ↑ Saxena, Ridhima (5 December 2019). "CPPIB pledges $600 mn in NIIF's master fund" (in en). mint. https://www.livemint.com/companies/news/cppib-to-invest-up-to-600-million-in-niif-s-master-fund-11575558595062.html. 
  29. ↑ "NIIF, DP World to invest $3 bn" (in en-IN). The Hindu. 2018-01-22. ISSN 0971-751X. https://www.thehindu.com/business/Industry/niif-dp-world-to-invest-3-bn/article22492180.ece. 
  30. ↑ Reporter, B. S. (2018-01-22). "NIIF's first investment: A $3 bn fund for logistics biz with UAE's DP World". Business Standard India. https://www.business-standard.com/article/economy-policy/niif-s-first-investment-a-3-bn-fund-for-logistics-biz-with-uae-s-dp-world-118012200421_1.html. 
  31. ↑ "Hindustan Infralog acquires 90% stake in Continental Warehousing". Live Mint. 2018-03-18. https://www.livemint.com/Companies/jCQOHr1ptz8ybNNRnEvJXO/Hindustan-Infralog-acquires-90-stake-in-Continental-Warehou.html. 
  32. ↑ "NIIF infuses $300 mn in UAE-based DP World's unit Hindustan Ports". VCCircle. https://www.vccircle.com/niif-infuses-300-mn-in-uae-based-dp-world-s-unit-hindustan-ports. 
  33. ↑ Balakrishnan, Reghu. "EverSource, NIIF buy stake in Ayana Renewable for $330 million". The Economic Times. https://economictimes.indiatimes.com/industry/energy/power/eversource-niif-buy-stake-in-ayana-renewable-for-330-million/articleshow/68197372.cms?from=mdr. 
  34. ↑ "NIIF-backed Ayana Renewable crosses 1-GW operational portfolio mark, Energy News, ET EnergyWorld" (in en). ETEnergyworld.com. https://energy.economictimes.indiatimes.com/news/renewable/niif-backed-ayana-renewable-crosses-1-gw-operational-portfolio-mark/89093378. 
  35. ↑ "EESL and NIIF Partner for Smart Meters deployment across India". The Leading Solar Magazine In India. https://www.eqmagpro.com/eesl-and-niif-partner-for-smart-meters-deployment-across-india/. 
  36. ↑ "NTPC and NIIF Sign Pact to Attract Investment for India's Renewable Sector". Mercom India. 17 July 2020. https://mercomindia.com/ntpc-niif-sign-pact-india-renewable-sector/. 
  37. ↑ "NIIF to acquire two toll road projects from Essel". VCCircle. https://www.vccircle.com/niif-to-acquire-two-toll-road-projects-from-essel. 
  38. ↑ Gaur, Vatsala. "NIIF commits 120 million pounds in partnership with UK govt to launch Green Growth Equity Fund". The Economic Times. https://economictimes.indiatimes.com/industry/banking/finance/niif-commits-120-million-pounds-in-partnership-with-uk-govt-to-launch-green-growth-equity-fund/articleshow/63834725.cms. 
  39. ↑ Dhanjal, Swaraj (18 January 2022). "EverSource closes its climate impact fund at $741 million" (in en). mint. https://www.livemint.com/news/india/eversource-closes-its-climate-impact-fund-at-741-million-11642485927165.html. 
  40. ↑ Bureau, Our (16 October 2018). "NIIF invests Rs 660 cr in HDFC Capital realty platform" (in en). www.thehindubusinessline.com. https://www.thehindubusinessline.com/markets/niifs-fund-of-funds-invests-rs-660-cr-in-h-care-2/article25235795.ece. 
  41. ↑ "Somerset Indus Healthcare India Fund to invest in SME companies". IndiaMedToday. 29 October 2020. https://indiamedtoday.com/somerset-indus-healthcare-india-fund-to-invest-in-sme-companies/#:~:text=According%20to%20a%20report%20in,offshore%20entity%20domiciled%20in%20Mauritius.. 
  42. ↑ Sharan, Gunja (6 April 2022). "NIIF Invests $15 Mn In YourNest Venture Capital Via Its Funds Of Fund" (in en). Inc42 Media. https://inc42.com/buzz/niif-invests-15-mn-in-yournest-venture-capital-via-its-funds-of-fund/. 
  43. ↑ Saxena, Ridhima (15 July 2019). "NIIF may invest $100 million in Multiples PE's third fund" (in en). mint. https://www.livemint.com/companies/news/niif-may-invest-100-million-in-multiples-pe-s-third-fund-1563210961171.html. 
  44. ↑ Oct 31, PTI /. "NIIF to acquire controlling stake in IDFC infra finance arm for undisclosed amount - Times of India" (in en). The Times of India. https://timesofindia.indiatimes.com/business/india-business/niif-to-acquire-controlling-stake-in-idfc-infra-finance-arm-for-undisclosed-amount/articleshow/66446111.cms. 
  45. ↑ "Cabinet approves Capital infusion into NIIF Infrastructure Debt Financing Platform comprising Aseem Infrastructure Finance Limited and NIIF Infrastructure Finance Limited". https://pib.gov.in/PressReleseDetail.aspx?PRID=1675599. 
  46. ↑ Ray, Anulekha (25 November 2020). "Cabinet approves equity infusion of ₹6,000 crore into NIIF" (in en). mint. https://www.livemint.com/politics/policy/cabinet-approves-equity-infusion-of-rs-6-000-crore-into-niif-11606296889837.html. 
  47. ↑ "NIIFL to invest Rs 2,100 crore in Manipal Hospitals through NIIF Strategic Opportunities Fund". 3 April 2021. https://www.constructionweekonline.in/business/17147-niifl-to-invest-rs-2100-crore-in-manipal-hospitals-through-niif-strategic-opportunities-fund. 

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