Lured by the growth potential of the Indian telecom sector, leading European banks have already committed over Rs 2,000 crore for development of infrastructure in the country.
German banking major KFW Bankengruppe, European majors Bank JB, Standard Chartered and The Netherlands Development Finance Company and Swedfund were among others to have committed to invest in the country.
KFW Bankengruppe has committed around Rs 364 crore for various infrastructure funds in the country through its subsidiariesDEG (a development finance institute) and KFW Ipex Bank.
The banking group, which has 341 billion euro under management, has invested 20 million euro (Rs 114 crore) in IL&FS' infrastructure fund, 4 million euro (Rs 22.8 crore) in IDFC fund, 20 million euro in SREI Infrastructure and 20 million euro in GTL Infrastructure. European major Bank JB, which manages over 200 billion euro, has also committed 15.5 million euro (Rs 88.35 crore) to GTL Infrastructure.
FMO, with 2 billion euro under management, has promised to invest in India Infrastructure Equipment in return for a 17.24 percent stake, while Swedfund, that manages over 150 million euro , has also committed to invest in India Infrastructure Equipment for a 17.24 percent stake.
GTL Infrastructure had also raised an unsecured unsubordinated debt of Rs 1,500 crore from a consortium of banks, led by Standard Chartered. State Bank of India and Bank of Baroda were also part of the consortium.
Manoj Tirodkar, chairman, GTL Infrastructure said, "The growth of Indian telecom sector is interesting and this is one of the reasons for the interest shown by European bankers. Moreover, these commitments are mainly in the form of foreign currency convertible bonds. These are also provided at a low-cost, at around 200 points over LIBOR, and for a long duration of 8-10 years."
According to an industry analyst, the telecom infrastructure sector needs over $20 billion, while the passive infrastructure segment needs an investment of over $12 billion. This is the opportunity the global bankers are seeking to exploit.
"The Indian telecom sector has huge rollout plans and needs huge investments, especially with the emergence of 3G and Wi-Max technologies. The investments would help in the sector's expansion plans and faster rollout of services," Alcatel-Lucent Vice President Ravi Sharma said.
Alcatel-Lucent is one of global majors that is actively involved in the rollout of telecom infrastructure in India.
