March 2011
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Kotak Mahindra Plans $300 Million Infrastructure Fund

Kotak Mahindra Group said Sumitomo Mitsui Banking Corp. will invest in a $300 million fund that will buy stakes in infrastructure projects.

Kotak Mahindra plans to raise funds from domestic and overseas private-equity investors for Indian power generation, road, port and airport projects, it said in a statement to the Bombay Stock Exchange today. Toronto-based Brookfield Asset Management Inc. (BAM/A), Tokyo-based Sumitomo Mitsui and Kotak will together contribute 22.5 percent of the capital, it said.

Prime Minister Manmohan Singh’s government is easing rules to lure cash from abroad as Asia’s third-biggest economy plans to double spending on public works to $1 trillion in the five years to 2017. India cut a withholding tax on funds that invest in infrastructure debt to 5 percent from 20 percent in a budget released on Feb. 28.

“Individually and collectively, the three entities strongly believe in the long-term growth prospects of the Indian infrastructure sector,” C. Jayaram, executive director of Kotak Mahindra Bank, said in the statement. Sumitomo Mitsui, a unit of Japan’s second-largest bank by market value, bought a 4.5 percent stake in Kotak Mahindra last year.

Group companies Kotak Investment Advisors Ltd. and Kotak Mahindra U.K. Ltd. will manage the funds raised locally and overseas, the statement said. Suman Saha, who was earlier executive director at the Equity Product Group for Kotak Investment Banking, will head the project, it said.

Through its group companies, Kotak Mahindra offers financial services ranging from investment banking to life insurance.













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