TFCI to Anchor Hospitality, Real Estate AIFs

New Delhi [India], January 5: Tourism Finance Corporation of India Limited (TFCI) has announced a strategic expansion of its alternative investment activities, deciding to participate as a co-sponsor and anchor investor in two Category II Alternative Investment Funds (AIFs). The move underscores the company’s calibrated shift toward equity-linked investments and asset management-led growth opportunities.

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

Separately, TFCI will also participate as an anchor investor in the Certus Real Estate Fund, another Category II AIF, committing up to 10% of the total fund size. The registration application for the Certus Real Estate Fund has likewise been submitted to SEBI.

Strategic Diversification Through AIF Participation

Commenting on the development, Anoop Bali, Managing Director of TFCI, said the initiative 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 the move as a continuation of TFCI’s gradual transformation from a niche tourism-focused lender into a more diversified non-banking financial company (NBFC) with a broader financing and investment mandate. Participation in AIFs is expected to provide the company with exposure to equity and quasi-equity opportunities without materially increasing balance sheet risk.

Strengthening Presence Beyond Traditional Lending

The AIF structure enables TFCI to deploy capital alongside professional fund managers, combining institutional oversight with sector-specific expertise. This approach is particularly relevant in hospitality and real estate segments where long gestation periods and cyclical demand often make traditional lending models less flexible.

By anchoring and co-sponsoring funds rather than fully underwriting projects, TFCI can participate in upside potential while maintaining prudent capital allocation. Analysts note that such structures also allow NBFCs to remain competitive in a financial ecosystem increasingly favouring blended debt-equity solutions.

A Broader Institutional Mandate

TFCI currently operates as a specialised NBFC–Middle Layer (NBFC-ML), providing financial assistance across a wide spectrum of sectors. These include tourism and hospitality infrastructure, manufacturing, renewable energy, social and urban infrastructure, real estate, structured credit, NBFC and housing finance company (HFC) funding, as well as lending against listed securities.

In parallel, the company has been scaling up its digital retail lending platform, signalling a dual focus on institutional financing and technology-enabled retail credit delivery.

Market Implications

Industry observers believe TFCI’s participation in the Holystone Hospitality Fund and Certus Real Estate Fund reflects growing institutional confidence in alternative investment platforms as engines of long-term value creation. With regulatory filings already made, the proposed AIFs are expected to add another dimension to TFCI’s capital deployment strategy once SEBI approvals are secured.

As competition intensifies within the NBFC space, such measured diversification initiatives are increasingly seen as critical for sustaining growth, optimising returns, and reducing overdependence on conventional lending cycles.

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