DMI Income Fund, an India-focused credit fund managed by an arm of IIFL Holdings (formerly India Infoline) and advised by DMI Finance, has invested $7.8 million (Rs 50 crore) in non-convertible debentures issued by Delhi-based listed realtor Ansal API group, it said on Wednesday.
This is the first investment by DMI Income Fund in the Indian corporate credit space. It now plans to invest between $200 million and $250 million in Indian corporate credit domain by December 2016.
DMI Income Fund, which seeks to invest in listed, rated and secured Indian corporate debt, is managed by Singapore-based institutional equities arm of IIFL, IIFL Capital Pte Ltd. DMI Management Services Pvt Ltd (a wholly owned subsidiary of DMI Finance Pvt Ltd) is the Indian advisor for the fund.
The fund was floated to provide foreign investors a platform to participate in India's rapidly growing credit markets. It is an open-ended fund and generates quarterly returns. In addition to unhedged USD and JPY classes, the fund also has hedged USD and JPY classes to give investors further product choice.
"India needs hundreds of billions of dollars in debt capital. Global investor interest in Indian local currency corporate debt is high. We expect this interest to rise further as local markets are opened and existing barriers to entry are dismantled," said DMI Finance's co-founder and joint-managing director Shivashish Chatterjee.
DMI Finance is a RBI regulated non-banking finance company (NBFC) and was set up in 2008. It has lent over Rs 1,500 crore to corporate and retail borrowers pan-India. Burman Family, the promoters of Dabur India, had acquired a strategic stake in Delhi-based DMI Finance two years ago.
DMI Finance, founded by Shivashish Chatterjee and Yuvraj C Singh in 2009, both former executives of Citigroup, specialises in secured lending and also entered into asset reconstruction after picking up equity stake in Alchemist Asset Reconstruction Company. In April 2012, DMI acquired 16 per cent stake in Alchemist Asset Reconstruction Company for around Rs 32 crore.
“IIFL Capital’s specialised expertise across key areas and DMI Finance’s on-ground experience and deep understanding of the Indian credit markets will provide global investors the much-needed avenue to opportunistically chase attractive yields from a variety of options available in the Indian credit market,” Amit Shah, CEO, IIFL Capital, said in the statement.