With the boom in the infrastructure industry, private equity investors are now taking part in the spiralling growth by picking up stake in infrastructure and construction companies or by setting up exclusive funds to finance infrastructure projects.
In fact in recent days, the industry has seen some private equity funds pumping in huge investments for a stake in infrastructure and construction companies. The US-based Blackstone group has recently announced its Rs 615-crore investment in Hyderabad-based Nagarjuna Constructions for a 12.2% stake in the company. The investment would be done in two tranches. Ramky Infrastructure Ltd also had private investors making investment for a share in the company with Sabre-Abraaj Private Equity Fund I picking up 8.1% share for a consideration of Rs 75 crore and Infrastructure Leasing & Financial Services (IL&FS) taking 5.4% stake for Rs 50 crore.
Indu Projects Ltd also has three US-based realty private equity investors lined up to fund more than Rs 450 crore in equity in three of its investment vehicles. The company had earlier raised Rs 99 crore from Nimmagadda Prasad of Matrix Laboratories Ltd and Rs 150 crore from Citigroup Venture Capital International Ltd. Reports suggest that private equity major 3i is in talks with Mantri Developers Private Ltd for investing up to $100 million (over Rs 408.80 crore). The investment is expected to be routed into a special purpose vehicle (SPV) for a specific project.
On the other hand, there are some big players who are finalising their plans to set up exclusive funds for infrastructure projects.
For instance, IL&FS has recently said it is entering into a partnership with private equity fund Trikona Capital Group to deploy around $1 billion (over Rs 4,088 crore) for development of infrastructure projects in the country over the next four-five years. To start with, IL&FS Trikona Infrastructure would deploy $100 million (over Rs 408.80 crore), of which Trikona would contribute $90 million (about Rs 367.92 crore) and the remaining would come from IL&FS.
London-based venture capital and private equity fund, DukeIndia is also planning to raise and invest about $800 million (over Rs 3,270.40 crore) in Indian companies over the next 2-3 years. The fund has got commitments of $500 million (about Rs 2,044 crore) for setting up two sector-specific funds. DukeIndia has launched a $300 million (over Rs 1,266.40 crore) real estate fund to invest in specific real estate projects in India. In fact, it has already begun due diligence on several real estate projects and is likely to make investments over the next six months.