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MFs with 5-yr record can float infra debt funds

MFs with 5-yr record can float infra debt funds
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With regard to the infrastructure debt funds (IDFs), the SEBI board has approved the framework for setting up of the IDF by any existing mutual fund house that has been in the infrastructure financing business for at least five years. These IDF schemes would invest 90 per cent of its assets in the debt securities of infrastructure companies or Special Purpose Vehicles across all infras­tructure sectors, said a release from SEBI. The minimum investment into an IDF scheme would be Rs 1 crore with Rs 10 lakh as minimum size of the unit.

However, it was made cle­ar that the credit risks associated with underlying securities of the schemes would have to be borne by the investors and not by the IDF.

Also, the IDF is to have a minimum of five investors with no investor owning more than 50 per cent of net assets of the scheme. The regulation mandates that a commitment of up to Rs 25 crore from strategic investors is required.

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