Kotak Mahindra (UK) Ltd (KMUK), a wholly owned subsidiary of India’s Kotak Mahindra Bank, is to launch the Kotak India Infrastructure Fund Limited, a new closed-ended investment company incorporated in Guernsey which will be listed on the London Stock Exchange.
The fund’s investment objective will be to provide shareholders with long term capital appreciation by primarily investing in listed and to-be-listed equity and equity linked securities of companies registered in India or deriving a significant portion of their business from India. nvestec Bank plc has been appointed as Sponsor and Broker in connection with the Issue.
Kotak Mahindar is looking to raise a maximum of GBP100m through an institutional placing and an offer for subscription aimed at private investors. Investors will be given exposure to a portfolio of 40-60 companies involved in India’s fast growing infrastructure sector.
Using a mix of top-down and bottom up stock selection strategy, Nitin Jain, the principal fund manager, will focus on investing in a diversified portfolio to capitalise on India’s growing private sector involvement in the infrastructure sector.
India’s infrastructure sector has been largely insulated from the global macroeconomic environment. It has been recognised as pivotal to sustaining an overall GDP growth of +8%. The Indian Government has earmarked USD1 trillion of spending targeted at the infrastructure sector over the next few years, with the private sector set to benefit from this sectoral push.
“The listed Indian infrastructure universe is broad, liquid and deep with over 360 listed entities having a market capitalisation of over USD50 million," says Nitin Jain. "With the increased government spending, the sector is poised for a valuation re-rating in the coming years, and may offer superior long-term risk adjusted returns.”