Posted October 07, 2018 08:23:21One of the big questions facing the Indian government is whether agco financing is a sustainable, long-term investment in the country’s economy.
But it is already proving to be an attractive option for some.
Agco Finance, a private investment fund which provides loans to banks and other financial institutions, says it is seeing a strong interest from Indian corporates and investors to tap the funds.
Its latest round of funding is just the latest in what has been a busy quarter for the firm.
The firm has also been making headway in attracting foreign investors to invest in India, with the government in the past two months approving the first private investments in the agco sector.
According to an Agco Finance report, in 2017, the firm raised an undisclosed amount in a $500 million Series B round and is now seeking $1.2 billion in additional funding.
It also says it has secured commitments of $1 billion from the Chinese state-owned firm State Grid, with a third of that coming from an Indian company called Suresh Infrastructure, and $1 million from a Chinese consortium, Caijing.
Agco finance is a venture capital firm run by Indian businessman Pankaj Khanna, who is also an investor in private equity firm, Aravani Capital.
It has already invested $100 million in the infrastructure sector in the first two quarters of the year, with more to follow.
The firm also said in a statement that it has raised a further $20 million in Series B funds, of which $12 million was secured from the investment bank State Grid.
Agco has already received $1,000 million from the government to fund the infrastructure projects, including the construction of the new National Capital Region Expressway.
It also has $200 million in funding commitments from the Ministry of Finance, and a further amount of $250 million is pending.
In September, Agco finance announced the launch of a new subsidiary, AgCo Bank, which would be run by a wholly-owned subsidiary of the firm, Agcovillage, to help finance infrastructure projects in the national capital region.
In November, Agcom Finance announced it had secured $50 million in a Series B investment from China’s State Grid Investment Group.
With India’s $1 trillion in infrastructure, it would seem there is an appetite among investors to lend their money to agco companies and banks.
While some of these companies have been investing in infrastructure projects across the country, Agcos investment in agco loans is particularly strong in the capital region, with investments totaling nearly $400 million.
Last year, Agcon Finance said it had raised $10 million from Chinese state owned firm Caijiong Investment Group, a subsidiary of Caiji Capital Group, to finance infrastructure works in the state capital region in India.
As of December 31, Agcco Finance had raised nearly $1bn in a round of financing, up from $1 in the previous financial year.
The firm says it expects to invest around $100 billion in infrastructure across the national Capital Region, which is currently estimated to cost around $2 trillion.