0.1 overview

Overview

CIIF offers an opportunity to international investors to gain an exposure to India’s core infrastructure sectors and benefit from the specialized knowledge, project risk understanding and asset management expertise of the Kotak Mahindra Group. CIIF has cornerstone investments from Brookfield Asset Management Group, Canada and Sumitomo Mitsui Banking Corporation, Japan. It also has investments from Japan Bank for International Cooperation (JBIC), a policy based financial institution of the Government of Japan, and a leading life insurance company from Asia.

Kotak Mahindra Asset Management (Singapore) Pte. Ltd. (“KMAMS”) is the investment manager of the Fund. Kotak Investment Advisors Limited acts as an investor advisor to KMAMS.

Investment Strategy

CIIF invests in companies engaged in power generation and transmission, transportation (roads, ports and airports), water treatment and supply, waste management and gas transmission, besides distribution and storage in India.

CIIF undertakes the following types of investments:

Direct investments in infrastructure assets, through selective investments in project companies across a variety of infrastructure sectors and

Investments in infrastructure holding companies, which are essentially investment vehicles created by project sponsors to further invest in downstream project companies. Since infrastructure holding companies, at the time of CIIF’s investment, have investments in underlying project assets in different stages of development, construction and operation, CIIF believes that investments in such holding companies offer the maximum opportunities for capital appreciation, as its underlying investments commence operations and mature in the medium to long-term, and thus get re-rated.

CIIF typically invests between USD 15 - 18 million per transaction. By participating in the mid-size infrastructure market, CIIF endeavors to:

Invest in less complex projects that are easier to implement
and operate and

Play in a segment that is distinct from large infrastructure projects that typically raise financing from global financial institutions and/or private equity funds. By focusing on a different segment, CIIF believes it benefits from a better ability to negotiate entry terms.

0.2 Cornerstone Investors

Sumitomo Mitsui Banking Corporation, Japan is the second largest financial services group in Japan in terms of market capitalization with a significant presence in infrastructure project finance globally and Brookfield Asset Management, a leading global alternative asset manager with assets across real estate, renewable power, infrastructure and private equity are the cornerstone investors in the Fund.

Other investors in the fund are Japan Bank for International Cooperation (JBIC), a policy based financial institution of the Government of Japan, and a leading life insurance company from Asia.

The Investment Committee, which approves all investments, has senior representatives from the Sponsor and Cornerstone Investors and decisions are taken by consensus.

Our Team

0.3 our team

Suman Saha

Head – Infrastructure Fund

Suman Saha is Head of Kotak Infrastructure Fund at Kotak Investment Advisors Limited. Suman established the Infrastructure Funds management

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Akshay Gupta

Executive Director

Akshay is the Executive Director of Kotak Infrastructure Fund at Kotak Investment Advisors Limited. He is part of the Infrastructure Funds management...

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Debasmita Ghosh

Senior Manager

Debasmita joined Kotak Investment Advisors Ltd in July 2018. Prior to joining KIAL...

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0.4 Select Portfolio

Project Galaxy

In March 2015, CIIF committed approximately USD 18 million (together with a global renewable energy fund and the management team, approximately USD 32 million in aggregate) to a new solar energy platform (“Galaxy”) with the objective of building a world-class investor-owned solar IPP which, by 2020, is expected to grow to a capacity of 200 MW.

CIIF’s investment team had been tracking the Indian solar sector for some time and after the rapid fall in prices of solar modules and decline in solar tariffs to reasonable levels, it decided to actively pursue an investment in the sector in 2014. However, after analyzing virtually every existing solar platform at that time, all of which had significant legacy issues (e.g., un-hedged foreign currency debt, high and possibly unsustainable tariffs, unjustifiable valuation expectations), it decided to build Galaxy from scratch by partnering with a professional management team with a strong track record as well as experience in designing, developing, financing, constructing and operating grid connected solar IPPs in India.

Since the first drawdown in June 2015, Galaxy has organically grown to a portfolio of five projects with aggregate 120 MW capacity and four of which (100 MW) have since been commissioned and are performing in line with expectations. One project of 20 MW is under development. CIIF’s investment team works very closely with Galaxy’s management team in monitoring plant performance, negotiating EPC and other procurement contracts, and raising debt and equity capital for the projects.

Galaxy, with the active support of our team, recently raised additional capital from a global investor and proposes to double its current capacity over the next couple of years.

Project Cactus

Cactus involved an acquisition of 100% stake in (a) Five operating road assets and (b) a parcel of industrial land measuring ~300 acres from a stressed Indian infrastructure developer in February 2016, jointly by CIIF and another infrastructure fund (together “the Acquirers”).

The total consideration paid for the acquisition by the Acquirers was INR 6.84 billion (approximately USD 100 million). Each road asset is housed in an individual SPV. All the roads are operating, 4 laned and the combined length of the 5 roads is 239 km. All of them operate under concessions granted by the National Highways Authority of India, an entity owned and controlled by the Government of India. Four of the five roads are BOT (Annuity) projects and one is a BOT (Toll) project. The roads are geographically spread across 4 Indian states.

Post the acquisition, the Acquirers have successfully completed a debt refinancing of INR 13.95 billion across the 5 road assets. Routine and/ or major maintenance activities have been undertaken, and continue to be undertaken across the assets to maintain and improve their quality. Apart from the board, which meets regularly to review the performance of the assets and set near term targets, a specific asset management committee has been constituted where the critical day-to-day issues regarding the assets are discussed between the Acquirers and decisions implemented. KMAMS co-manages the assets.

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