SEBI notifies guidelines on infra debt fund

Market regulator SEBI today notified guidelines for launching infrastructure debt fund (IDF) which would invest 90% of its assets in debt securities of the sector companies.

"An infrastructure debt fund scheme shall be launched as close-ended scheme maturing after more than five years or interval scheme with lock-in of five years...," Sebi said in a circular.

Infrastructure debt fund (IDF) scheme, which can be set up by any existing mutual fund, would invest a minimum 90% of scheme assets in the debt securities and should have a minimum of five investors.

The minimum investment into IDF would be Rs 1 crore and the minimum size of the unit would be 10 lakh, Sebi said.

The IDF, which was proposed by Finance Minister Pranab Mukherjee in the Union Budget for FY12, is aimed at accelerating and enhancing flow of long-term debt for funding the ambitious programme of infrastructure development in the country.

Sebi said the strategic investor would have to make a firm commitment of Rs 25 crore. The units of infrastructure debt fund schemes shall be listed on the stock exchange.

"An infrastructure debt fund shall have minimum five investors and no single investor shall hold more than 50% of net assets of the scheme," Sebi added.

The requirement of infrastructure in the 12th Plan has been pegged at USD 1 trillion.

As per the government norms an IDF may be set up either as a trust or company. While the trust based IDF (Mutual Fund) would be regulated by Sebi, an IDF set up as a company (NBFC) would be regulated by RBI.