July 6 (Bloomberg) -- SREI Infrastructure Finance Ltd., an Indian company that invests in power, road and port projects, plans to raise $1 billion overseas to fund infrastructure development in Asia’s third-largest economy.
The company, based in Kolkata, will also raise 10 billion rupees ($214 million) for a domestic fund, Chairman and Managing Director Hemant Kanoria said in New Delhi today, without providing additional details.
SREI Infrastructure joins companies including Australia’s Macquarie Group Ltd. and London-based 3i Group Plc in aiming to tap investment opportunities in a nation that has doubled its target for infrastructure spending to $1 trillion in the five years starting 2012.
Shares of SREI climbed 1.4 percent to 82.6 rupees at the close of trading in Mumbai. The stock has gained 6.2 percent this year, surpassing a less than 1 percent advance in the benchmark Sensitive Index.
SREI, which offers equipment-leasing, project financing and advisory services, is part of groups of companies that have been awarded 54.7 billion rupees in orders for the development of highways in India last year, according to a May press release.
In April 2009, State Bank of India, the nation’s largest lender, and Sydney-based Macquarie set up a $1 billion infrastructure fund. In 2008, 3i Group raised $1.2 billion for its India infrastructure fund.
India, ranked below war-ravaged Ivory Coast and Sri Lanka for the quality of infrastructure, in May said it plans to set up a 500 billion rupee debt fund to build ports, roads and bridges.
India spent 6.5 percent of its gross domestic product in 2009 on infrastructure, compared with about 11 percent by China, according to an Ernst & Young India report. Failure to lift investment may imperil Prime Minister Manmohan Singh’s target of boosting economic growth to the 10 percent needed to pull 828 million people living on less than $2 per day out of poverty.
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