National Investment & Infrastructure Fund seeks to double assets to $10 billion

Created with much fanfare in 2015 under Modi’s administration, NIIF marks the country’s first big attempt to develop a capital-raising structure on home soil even as many sovereign entities make direct investments in India

India’s $4.9 billion quasi-sovereign wealth fund is seeking to double its assets under management to $10 billion within the next 30 months, fueled by surging demand for urban infrastructure in the world’s fastest-growing major economy.

Mumbai-based National Investment & Infrastructure Fund, backed by the Indian government alongside global investors such as Temasek Holdings Pte, Abu Dhabi Investment Authority and AustralianSuper Pty, is capitalizing on a big funding gap in the sector, according to Vinod Giri, managing partner for its infrastructure fund.

“We are seeing significant amount of investment requirements — almost double of what we have been seeing over the last five to seven years, across subsectors,” said Giri, who heads NIIF’s flagship infrastructure fund labelled the Master Fund.

The move comes as the likes of KKR & Co., Brookfield Asset Management Ltd. and GIC Pte are pumping in hundreds of millions of dollars to develop the country’s roads, renewable energy projects, telecom towers, warehouses and data centers. Prime Minister Narendra Modi faces pressure to upgrade India’s inadequate infrastructure and match the country’s aesthetics to its ambitions - or in his words, create “several Singapores” in the nation. Yet long delays, bad contracts and high costs remain big challenges.

Created with much fanfare in 2015 under Modi’s administration, NIIF marks the country’s first big attempt to develop a capital-raising structure on home soil even as many sovereign entities make direct investments in India. The fund also counts local investors among its backers.

NIIF, which currently has assets across its four strategies of infrastructure, climate, private markets and growth equity — is now raising $4.5 billion across successor funds for infrastructure and private markets, Giri said, adding that the firm is seeking to close it in three years.

Giri said NIIF anticipates most of its existing investors from the first fund to return to its second one for which it expects to mark the first close by early 2026. Funds typically start investing after raising a portion of the targeted corpus as part of the first close.

For the second infrastructure fund, Giri expects a new set of investors from Australia, Japan, US, Europe and Korea.

NIIF’s recent successful stake sales are likely to support the fundraising attempts, Giri said. NIIF sold its renewable platform in February. It has also disposed three out of five of its road assets in June.

The fund achieved a distribution to paid-in capital of 50% with its two exits, said Giri, adding that it means “for every dollar that our investors have given us till now, we managed to return half of that back to them.”