ICICI Venture (I-Ven), India’s largest private equity firm, is betting big on the Indian infrastructure story and is training its sights on deals sized in the range of $50-100 million, according to sources familiar with the situation. 

ICICI Venture, which has launched a new infrastructure fund in end-July, aims at a $1-billion fund size. It will raise $500 million in the first stage with a green shoe option of another $500 million.

According to sources close to the fund-raising exercise, though I-Ven started fund raising last month, it has received a good response from investors. "I-Ven is targeting domestic LPs in the initial stage and will approach the offshore LPs after the initial closure," he said.

This approach would be the same as India Advantage Fund Series 3, the generic fund from ICICI Venture, which raised $350 million from domestic investors in December 2009 before approaching foreign LPs.

“The new fund would invest mainly into two core areas – energy & transportation with a deal size in the range of $50-100 million. Though the infra fund may invest in a few greenfield energy projects, majority of its investments will go to brownfield projects,” he added. According to the source, it has been decided that not more than 40% of the investment will go to any one sector.

In June, ICICI Venture roped in Manikkan Sangameswaran, former managing director and head of infrastructure at Babcock & Brown India Private Limited, to head the Infrastructure fund. Manikkan, who joined as President, has over 16 years of experience with companies such as ABN Amro, UBS Securities (India), SBC Warburg, TATA Economic Consultancy Services and Voltas Limited.

It has appointed Partha Dey, who was general manager with the Project Finance business of ICICI Bank, as president. Also, Sandeep Malhotra who was with PE team joined as Senior Director. The team has Suketu Kumar as Vice President and Amit Goenka and Chhatradhari Chakrovorty as Associate VPs.

The Indian infrastructure story continues to be red-hot given the deal data this year. According to VCCEdge data, about 20 deals worth $1.38 billion took place till date in 2010 in infrastructure. Some of the top deals include Macquarie-SBI Infrastructure Fund’s acquisition of 11% stake in Hyderabad-based Viom Networks Ltd for Rs 1,400 crore from Quippo Telecom; Macquarie-SBI Infrastructure Fund’s investment of Rs 922 crore in Bangalore- based GMR Airports Holding Pvt. Ltd; the Rs 1,933-crore investment in Asian Genco Pte Ltd by PTC Ashmore India Energy Infrastructure Fund, Morgan Stanley Infrastructure Partners, General Atlantic LLC, Goldman Sachs Investment Management, Norwest Venture Partners and Everstone Capital and the Rs 465-crore investment in GMR Energy Ltd by IDFC, Argonaut Ventures and Ascent Capital Advisors India.

ICICI Venture currently manages three third party capital funds in its PE practice: India Advantage Fund Series 1 ($245 million), India Advantage Fund Series 2 ($810 million) and India Advantage Fund Series 3 ($400 million-commitments received till March 31, 2010), representing an aggregate original corpus of $1.45 billion. Apart from PE funds, I-Ven has India Advantage Fund (Real Estate Series 1) of $562 million and a India Advantage Fund (Mezzanine Series 1) of $51 million.

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