IDFC India: Infrastructure Investment Intermediaries

Posted: 11 Apr 2012

See all articles by John D. Macomber

John D. Macomber

Harvard University - Business School (HBS)

Viraal Balsari

Harvard Business School, India Research Center

Date Written: June 6, 2010

Abstract

Indian financial intermediary matching international capital to local infrastructure decides how to balance range of services, risk adjusted return, margin pressure, and nation building. IDFC was chartered with partial ownership from the Indian government to help evaluate policy and be a model for how private finance could be attracted to public infrastructure. As the nation and company grow, the firm also grows and embarks on a strategy of rapid expansion, offering a wide new range of financial products, and participating in many aspects of the supply chain. Teaching questions include revisiting the original mission, contemplating the reduced margins and increased risks that come with entering a number of domains which already have established incumbents, and the trade-offs between maximizing shareholder return (for example through investments in full tariff power projects in rich cities) and maximizing the benefit to the nation (for example through subsidized tariff water projects in poor states).

Learning Objective: Explore how funds are sourced and allocated to infrastructure projects. Explore government sponsored enterprises and public private partnerships. Discuss the tradeoffs in accomplishing a mission, serving a clientele, growing a portfolio, or concentrating on risk-adjusted return. Extend to other situations and other countries.

Suggested Citation

Macomber, John D. and Balsari, Viraal, IDFC India: Infrastructure Investment Intermediaries (June 6, 2010). Harvard Business School Finance Case No. 210-050, Available at SSRN: https://ssrn.com/abstract=2038372

John D. Macomber (Contact Author)

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Viraal Balsari

Harvard Business School, India Research Center ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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