ICICI Bank To Raise $2b From Overseas Investors

ICICI Bank India''s most valuable, is seeking $2 billion from overseas investors to tap demand for roads, ports and power in the fastest-growing economy after China, following similar funds by Citigroup and Blackstone Group. The fund raising will probably be finished in about three months, Chanda Kochhar, deputy MD at the Mumbai-based bank, said on Friday. There''s a lot of demand for funds from sectors like power, airports, roads and telecoms, Kochhar said. The fund will have a lifetime of more than 10 years, she said.

Indian government plans to build $320 billion of infrastructure projects to ease bottlenecks that are constraining growth. GDP has expanded at a record 8.6% average pace since 2003, faster than any of the world''s 20 biggest economies except China. Citigroup, buyout firm Blackstone and Infrastructure Development Finance in February agreed to put $250 million each into an infrastructure fund that will invest $2 billion in companies.

In August, Europe''s biggest publicly traded buyout and venture capital firm 3i Group said it will invest a minimum of $250 million in an infrastructure fund that was set to raise $1 billion. India''s infrastructure story is just beginning and it has strong appetite for funds, said TP Raman, who oversees assets equivalent to $2.5 billion as MD of Sundaram BNP Paribas Asset Management. ICICI''s latest fund will only be available overseas as domestic investors have other ways to invest in infrastructure projects, Kochhar said. The fund does not promise or target any rate of return and it has not decided on how much it will leverage, she said.

We would initially begin with investments from the fund and later decide whether to leverage or not, Kochhar said.