SBI, Macquarie see huge opportunities in infrastructure

As population growth and demographic change continue to exert pressure on India's existing urban infrastructure, the country would require a total funding of more than $1 trillion for a radical overhaul in its existing systems

State Bank of India (SBI) and Macquarie Capital (Macquarie) have said that they see a huge opportunity in infrastructure investment, given that India’s infrastructure deficit presents a tremendous opportunity for investors.

“Over the next 10 years, the total funding requirement for infrastructure in India is anticipated to exceed $1 trillion, as population growth and demographic change continue to exert pressure on India's existing urban infrastructure. We are confident that the SBI & Macquarie joint venture is well positioned to participate in this growth,” said R Sridharan, managing director and group executive for associates & subsidiaries, SBI. 

SBI Macquarie Infrastructure Management Pvt Ltd (SMIMPL)—a joint venture between SBI and Macquarie—will manage a soon-to-be-established domestic fund, SBI Macquarie Infrastructure Trust (SMIT), which will invest in infrastructure projects and companies in India after obtaining registration with the Securities and Exchange Board of India (SEBI), the company said in a release.

SMIMPL on Thursday appointed Macquarie Capital's senior managing director Varun Bajpai as chief executive. It also appointed SBI's general manager Praveen Gupta as deputy chief executive of SMIMPL.

The appointments of Mr Bajpai and Mr Gupta come at a time when some analysts are forecasting India’s GDP growth to accelerate to around 8% next year. There is also a renewed optimism over future economic reforms. Infrastructure remains a priority for India, the SMIMPL release said.

According to the Planning Commission, India’s infrastructure investment requirements over the next five years are estimated to be nearly $500 billion. 

Macquarie and SBI recently established the Macquarie SBI Infrastructure Fund (MSIF), for international investors, with a first close of $887 million in capital commitments alongside a direct co-investment of $150 million from SBI, bringing total capital raised to $1.04 billion.

 

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