It has been created under SEBI Regulations, 2012 as a Category II Alternate Investment Fund (AIF).
Some of the major objectives of NIIF include
A. Raising funds through suitable instruments
B. To attract the anchor investors for their participation as partners in NIIF
C. To consider and approve the candidate companies, institutions, and projects for investments
D. To invest in the corpus created by the Asset Management Companies (AMCs) to invest in private equity.
E. And To provide advisory service and prepare a shelf of infrastructure projects.
It was founded to provide infrastructure investment for maximizing the economic impact of commercially available projects (Greenfield Projects and Brownfield Projects).
The idea to set up NIIF was addressed in the Union Budget 2015-2016 by the former Finance Minister of India, Arun Jaitley. Department of Economic Affairs approved the National Investment and Infrastructure Fund (NIIF) in August 2015.
49% share is held in the National Investment and Infrastructure Fund by the Indian Government. Some of the domestic investors of NIIF are HDFC Bank, Axis Bank, ICICI Bank, and Kotak Mahindra Life.
NIIF is a government-backed investment fund that manages more than $4.3 billion of equity capital commitments across three funds.
Types of NIIF Funds
The National Investment and Infrastructure Fund (NIIF) is currently managing three funds namely: Master Fund, The Private Markets Fund, and Strategic Fund.
Master Fund: The Master Fund was founded primarily by investing in well-established enterprises having a long-term agreement and which are operating in a regulated environment with a good history.
This fund also invests in infra-related projects and follows the strategy of establishing sector-specific companies in association with prominent companies. 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.
The Private Markets Fund: The Private Markets Fund was formerly known as Fund of Funds. It aims at investing in funds that are managed by renowned fund managers with an excellent track record.
It also invests as anchor investors, thus, allowing the fund managers to accumulate more funds from the institutional investors. Fund of funds may also enter into joint ventures with the fund managers.
Strategic Fund: This fund invests primarily in equity and equity-linked instruments and is registered as an Alternative Fund II under the Securities and Exchange Board of India (SEBI). The Strategic Opportunities Fund directly invests in companies and has supported FirstCry and Ather Energy.
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.
The first investment deal worth USD 1 billion was signed by NIIF in October 2017 with the Abu Dhabi Investment Authority (ADIA). ADIA was the first international investor in the NIIF’s master fund.
In June 2018, the Asian Infrastructure Investment Bank announced to invest an amount of USD 200 million in the NIIF. They invested USD 100 million in June 2018 and said they would invest another USD 100 million on a later date.
India-Japan Fund
In October 2023, NIIFL announced the establishment of its first bilateral fund, the India-Japan Fund (IJF) in partnership with Japan Bank for International Cooperation (JBIC), a policy based financial institution wholly owned by the Government of Japan.
IJF has a target corpus of INR 49 billion (USD 600 million), with the Government of India contributing 49% and the remaining 51% contributed by JBIC.
In January 2024, IJF made its first investment, when it invested ₹400 crore in Mahindra Last Mile Mobility Limited, which houses Mahindra & Mahindra Ltd's last-mile mobility business including three wheelers (Alfa, Treo, Zor) and four-wheeler SCV (Jeeto) brands.
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