Kotak Investment says Special Situations Fund to target NPL opportunities in India

Kotak Investment Advisors on Thursday said the Kotak Special Situations Fund will target a range of non-performing loan (NPL) opportunities in India.

In an interview to CNBC-TV18, Srini Sriniwasan, managing director and chief executive officer, said, The fund is structured as an alternative investment fund and we are committing $100 million. So we are starting off with a capital pool of $600 million. We have not decided on the fund size and the joining of other investors."

"We don’t have any specific preference for any particular sector. We are looking for operating assets, which are generating cash flows or situations where there is very significant asset value. We would be interested to provide financial solutions and we would potentially be doing them on our own or with strategic operating partners. We are quite happy to finance the operators or if they are entering into a settlement agreement with the lenders. The regulations have recently been amended and we are seeing significant traction from situations where lenders are willing to enter into a settlement. So we are quite happy to provide capital," Sriniwasan said.

Yesterday, Kotak Investment Advisors launched the Kotak Special Situations Fund, which will target a range of non-performing loan opportunities in India.

The fund, which focuses on providing financial support to pre-stress businesses, is being anchored by a $500 million (about Rs 3,560 crore) commitment from a unit of Abu Dhabi Investment Authority (ADIA). It will target both pre-stress and distressed opportunities.

The Kotak Special Situations Fund is structured as an Alternative Investment Fund under Sebi regulations and aims to reduce the number of non-performing assets in the economy.