– Amongst the few thematic equities funds focused on monetising the Indian Infrastructure opportunity
– Experienced India-specialist Investment Manager
– Investing in a portfolio of 40-60 companies in India’s key growth sector
– Kotak Group committing capital alongside IPO investors
07:00 hrs GMT 13 January, 2011: Kotak Mahindra (UK) Ltd. (KMUK), a wholly owned subsidiary of India’s Kotak Mahindra Bank Ltd., today announces the forthcoming launch of Kotak India Infrastructure Fund Limited (‘the Company’), a proposed new closed-ended investment company incorporated in Guernsey which will be listed on the London Stock Exchange. The Company’s investment objective will be to provide shareholders with long term capital appreciation by primarily investing in listed and to-be-listed equity and equity linked securities of companies registered in India or deriving a significant portion of their business from India. Investec Bank plc has been appointed as Sponsor and Broker in connection with the Issue.
It is proposed that the Company will seek to raise a maximum of £100m through an institutional placing and an offer for subscription aimed at private investors. Investors will be given exposure to a portfolio of 40-60 companies involved in India’s fast growing infrastructure sector.
Using a mix of top-down and bottom up stock selection strategy, Nitin Jain, the principal fund manager, will focus on investing in a diversified portfolio to capitalise on India’s growing private sector involvement in the infrastructure sector.
India’s infrastructure sector has been largely insulated from the global macroeconomic environment. It has been recognised as pivotal to sustaining an overall GDP growth of +8%. The Indian Government has earmarked $1 trillion of spending targeted at the infrastructure sector over the next few years, with the private sector set to benefit from this sectoral push.
Nitin Jain, commented, “The listed Indian infrastructure universe is broad, liquid and deep with over 360 listed entities having a market capitalisation of over $50 million. With the increased government spending, the sector is poised for a valuation re-rating in the coming years, and may offer superior long-term risk adjusted returns.”
It is expected that the prospectus will be published by the Company in the week commencing 17 January 2011 and the offer for subscription will open from the date of publication.
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Notes to Editors
About the Proposed Kotak India Infrastructure Fund
Kotak India Infrastructure Fund Limited will be available to both institutional and private investors under a placing and offer for subscription (‘the Issue’).
The investment objective of the Fund is to provide shareholders with long term capital appreciation by primarily investing in listed and to be listed equity and equity linked securities of companies registered in India or deriving a significant portion of their business from India. The Company will invest in companies that are directly or indirectly involved in the infrastructure sectors in India.
It is intended that the portfolio will have 40 to 60 holdings and there would be no hedging of currency exposure (although the Board will reserve the right to do so). The Company will measure its performance against the FTSE IDFC India Infrastructure 30 Index, but it is expected that the portfolio will diverge substantially from the benchmark constituents.
In addition to subscribing for ordinary shares at launch, investors will also receive subscription shares on a one-for-five basis at no additional cost. Each subscription share will carry the right to subscribe for one ordinary share at the issue price during the three year period ending on 31 December 2014.
The Ordinary Shares will be admitted to the Official List with a premium listing and the Subscription Shares will be admitted to the Official List with a standard listing. Both the Ordinary Shares and the Subscription Shares will be traded on the main market for listed securities of the London Stock Exchange.
About Kotak
– In 2010 the Kotak Mahindra group celebrated its first quarter-century of business. Since its establishment in 1985 the group has grown to become one of India’s financial services leaders
– It has significant presence across various businesses including commercial banking, retail banking, stock broking, asset management, life insurance and investment banking
– Kotak has c. USD 11 billion of assets under management / advisory (as at 30th September 2010)
– The offshore asset management team at Kotak specialises in providing ‘India-focused’ investment solutions to international investors seeking to participate in the India growth story
– Kotak has a range of funds open to both institutional and retail investors, the latter available through intermediaries and IFAs
About Kotak Mahindra (UK) Limited (“KMUK”)
Incorporated in the United Kingdom and authorised and regulated by the Financial Services Authority in the United Kingdom, KMUK is a member of the London Stock Exchange and is registered with the Securities Exchange Board of India as a Foreign Institutional Investor (FII). KMUK has its branch offices in Singapore and Dubai which are regulated by the Monetary Authority of Singapore and the Dubai Financial Services Authority respectively. KMUK is also registered as an investment adviser with the Securities and Exchange Commission, USA.
