Mumbai, Nov. 19: Even as the global cash crunch threatens to derail the fund-raising plans of several industries, global and Indian financial institutions are betting big on the country’s infrastructure sector.

Some bravehearts continue to pursue investors in an effort to get them to invest in India-specific infrastructure funds.

For instance, the UTI-Shinsei Bank-HSH Nordbank combine, which had announced plans to set up a $600-million infrastructure fund earlier this year, hopes to raise roughly 50 per cent in the next quarter. Later, it aims to increase the size of this fund to $2 billion.

IL&FS Private Equity had drawn up plans to rustle up $500 million but later upped the target to $800 million.

The IDFC-Citigroup combine, which had announced plans for a $5-billion fund (with $3 billion of debt), has raised nearly $1 billion. It hopes to garner another $1 billion by way of equity. Several other players such as Axis Bank and the Macquarie-SBI combine are still trying to persuade investors to put their money in the country’s infrastructure sector.

“I believe that this is a good time to invest in India’s infrastructure even though there is a slowdown as valuations are more realistic,” says Manash Mitra who heads the UTI-Shinsei Bank-HSH Nordbank infrastructure fund.

However, old-timers such as Shahzaad Dalal, managing director of IL&FS Investment Managers Ltd, remain sceptical. “Sure, valuations are more reasonable. Even if we grow at 6 per cent, the fact is that India is an infrastructure-deficit country. It is still a challenge to raise capital; even money from West Asia seems to be dwindling,” he said.

IDFC Private Equity’s CEO Luis Miranda agrees that the time is right to raise funds but the concern is the debt component of projects, which will become harder to raise.

The fact, however, is that in India growth has outpaced infrastructure development. The Planning Commission has estimated that India needs infrastructure investments totalling about $320 billion in the next five years, which will entail an equity component of $20 billion.

Infrastructure-dedicated funds are gungho over the prospects, especially with greater private participation in sectors such as airports, ports or mass rapid transportation systems.