The National Investment and Infrastructure Fund (NIIF) was established by the Government of India as a strategic, collaborative investment platform for international and Indian investors.
The idea to set up NIIF was addressed in the Union Budget 2015-2016 by the former Finance Minister of India, Arun Jaitley. The Department of Economic Affairs approved the National Investment and Infrastructure Fund (NIIF) in August 2015.
National Investment and Infrastructure Fund (NIIF) was set up as a sovereign wealth fund and is registered with the Securities and Exchange Board of India (SEBI) under SEBI Regulations, 2012, as a Category II Alternate Investment Fund (AIF).
It provides long-term capital for infra-related projects. Its primary role is attracting and channelling capital towards commercially viable infrastructure projects, ultimately accelerating India’s economic growth trajectory.
The NIIF stakeholders include:
- Government of India: The government holds a 49% stake in the NIIF
- Domestic Investors: Leading Indian financial institutions like HDFC Bank, Axis Bank, ICICI Bank, and Kotak Mahindra Life have participated as investors.
- Global Investors: The NIIF has also attracted international investors like the Abu Dhabi Investment Authority (ADIA) and the Asian Infrastructure Investment Bank (AIIB).
- Multilateral Development Banks: Institutions like the Asian Development Bank (ADB) have also contributed to the NIIF’s capital base.
The NIIF operates through various funds, each catering to specific infrastructure sub-sectors. It invests across Infrastructure and Growth Equity.
Per the latest update on its website, the NIIF manages over $4.9 billion in assets under management and has made over 65 Direct & indirect investments through its funds: Master Fund, Private Markets Fund, Strategic Opportunities Fund and India-Japan Fund.
The NIIF Master Fund is one of the largest India-focused infrastructure funds.
The Fund has been established to participate in the robust Indian infrastructure story, which is projected to see investments of close to $1.5 trillion over the next decade, NIIF said on its website.
The fund’s strategy is investing in high-quality businesses/assets across core infrastructure sectors.
Its Private Markets business provides global institutional investors a platform to access India’s private assets market through a mix of third-party fund managers and co-investment opportunities.
It has committed over $550 million across sectors and strategies, and its portfolio is currently a selection of seven funds, through which it has exposure to more than 45 portfolio companies.
The NIIF direct growth equity fund, The NIIF Strategic Opportunities Fund (SOF), is one of the largest India-focused growth equity funds. SOF was established to provide long-term capital to high-growth, future-ready businesses in India.
The fund’s strategy is to build a portfolio of large entrepreneur-led or professionally managed domestic champions and unicorns. SOF seeks to drive accelerated value creation, leveraging the NIIF ecosystem and its unique network of shareholders and partners.
Lastly, The India-Japan Fund (IJF) was set up in August 2023. IJF has raised ₹4,900 crore (about $600 million), with the Government of India (GoI) contributing 49% and the remaining 51% committed by the Japan Bank for International Cooperation (JBIC).
The India-Japan Fund aims to invest in India’s environmental conservation sector, bolstering renewable energy, e-mobility ventures, and circular economy initiatives like waste management and water conservation.
NIIF’s Key Investments:
* NIIF has invested $200 million in iBUS Network and Infrastructure Private Limited (iBUS) to propel digital infrastructure expansion in India
* NIIF announced its second investment in an airport venture, entering into binding agreements to invest up to ₹675 crore ($80 million) in GMR Visakhapatnam International Airport Limited (GVIAL), a special purpose vehicle to develop and operate the Bhogapuram International Airport (BIA).
* NIIF Private Markets business (NIIF Fund of Funds – I) announced an investment of ₹207 crore (~$25 million) in Amicus Capital Partners India Fund II. With a target size of $200 million, Amicus Capital Fund II expects to support businesses that leverage technology to scale early in their growth journey across sectors such as speciality manufacturing, technology & business services, healthcare, financial services and other sectors
* In January 2024, IJF announced its first investment, with a ₹400 crore ($48 million) investment in Mahindra Last Mile Mobility Limited, which houses Mahindra & Mahindra Ltd’s last-mile mobility business, including three-wheelers (Alfa, Treo, Zor) and four-wheeler SCV (Jeeto) brands.