TFCI to Co-Sponsor and Anchor Invest in Hospitality and Real Estate AIFs

Tourism Finance Corporation of India Limited (TFCI) has announced its strategic expansion into the alternative investment space by acting as a co-sponsor and anchor investor in two Category II Alternative Investment Funds (AIFs). This move signals a significant shift towards equity-linked and asset management opportunities, further diversifying TFCI's investment portfolio.

In a regulatory disclosure, TFCI revealed that it will co-sponsor and anchor invest in the Holystone Hospitality Fund, an equity-focused Category II AIF. The company has proposed a commitment of up to 5 percent of the total fund corpus. The registration application for the fund has already been filed with the Securities and Exchange Board of India (SEBI).

Additionally, TFCI will act as an anchor investor in the Certus Real Estate Fund, another Category II AIF, with an investment of up to 10 percent of the total fund size. The application for the Certus Real Estate Fund has also been submitted to SEBI.

Anoop Bali, Managing Director of TFCI, commented on the development, stating that the move aligns with the company's long-term diversification strategy. 'Our participation as co-sponsor and anchor investor reflects TFCI's intent to leverage its sectoral expertise while partnering with experienced fund managers. The AIF route allows us to support the hospitality and real estate sectors in a capital-efficient manner, while creating additional avenues for value creation,' Bali said.

Market participants view this initiative as part of TFCI's broader transition from a niche tourism-focused lender to a diversified non-banking financial company (NBFC) with a wider financing and investment mandate. The AIF structure is expected to provide TFCI with access to equity and quasi-equity opportunities without materially increasing balance sheet risk.

TFCI, a specialized NBFC-ML, offers financial assistance across various sectors, including tourism and hospitality infrastructure, manufacturing, renewable energy, social and urban infrastructure, real estate, NBFC and housing finance company (HFC) funding, structured credit, and lending against listed securities. The company has also been expanding its digital retail lending platform, further enhancing its service offerings and market reach.

This strategic move by TFCI is expected to bolster the company's presence in the alternative investment space, providing robust support to the hospitality and real estate sectors while creating new avenues for growth and value creation.