Tata group is all set to float a new $1 billion infrastructure fund to part finance infrastructure projects in the country.
Initiated by Tata Realty and Infrastructure (Tril), a wholly-owned subsidiary of Tata Sons, the fund will focus on building infrastructure, which is constraining the country's growth, across a wide range of areas from airports, roads and bridges, in addition to other urban infrastructure.
"We are in the process of tying up a $1 billion infrastructure fund to create the necessary resource base for the infrastructure projects that we are lining up. Our objective is to create world-class infrastructure with the best technology in India," Sanjay G Ubale, managing director and chief executive officer, Tril, told Financial Chronicle.
The new infrastructure fund to be raised from overseas investors is in addition to the existing $750 million Tata Realty Initiatives Fund-1, a real estate dedicated fund raised from overseas investors from Australia and elsewhere.
The move assumes significance in light of the serious difficulty infrastructure projects in India are facing in raising equity funds from a moribund market for initial public offerings of shares.
Raising long-term debt finance at competitive rates is crucial for the long-term projects to be economically viable. Recently, several public private partnerships in the infrastructure sector such as power plants have faced delays because bidders want more time to see where the financial markets settle down.
Tril has also bid for the development of the Udaipur and Amritsar airports in a consortium with Singapore's Changi International Airport and Tata Power. The consortium has qualified for the request for proposal stage in this case. The company has also qualified for 18 build-operate-transfer (BOT) projects of the National Highways Authority of India (NHAI), which involve constructing four to six lanes on the highway network across the country.
"We have put in our financial bids here and have roped in Italy's largest operator of toll roads -- Atlantia for these projects," says Ubale.
The company also plans to participate in redevelopment and modernisation of railway stations, development of the Worli-Mahalaxmi sea link bridge in Mumbai and development of logistics parks pan-India. The proposed logistics parks will aim to provide integrated logistics services such as warehousing, cross-docking and multi-modal transportation.
"We are also identifying sites for greenfield development of airports. In addition, we are in talks with reputed port development companies worldwide to develop some ports in the country," adds Ubale. Their maiden foray into the port sector, Dhamra Port in Orissa, a joint venture with Larsen & Toubro, however, has faced several constraints including protests from Greenpeace.