India’s first sovereign wealth fund NIIF has bought 90% stake in logistics firm Continental Warehousing in partnership with Dubai’s DP World, which is the first investment of the platform. This deal has got moving the plan of creating an investment platform for ports operations in India. The joint venture of NIIF and port operator DP World — Hindustan Infralog (HIPL) — will purchase the 90% stakes of Continental Warehousing (Nhava Sheva) Ltd for $400 million, ET reported.
“Hindustan Infralog Private Limited (HIPL)… announces the acquisition of a 90 per cent stake in Continental Warehousing Corporation (Nhava Seva) Ltd (CWCNSL),” the company statement in a statement. The purchase consideration is less than 5% of DP World’s net asset value as of the financial year 2017.
The Reddy family, founders of Continental Warehousing, one of the biggest in India, will retain the remaining 10% shareholding and stay involved in the business operations. HIPL has a wealth chest of $3 billion wealth chest to an investment platform in ports, terminals, transportation and logistics businesses in India.
NIIF shakes hands with DP World
In January this year, National Investment and Infrastructure Fund (NIIF) partnered with DP World and aims to use its $3 billion for investing in the ports sector. HIPL will invest in opportunities in the ports sector, and beyond seaports into areas such as river ports and transportation, freight corridors, port-led special economic zones, inland container terminals, and logistics infrastructure including cold storage.
First institutional investor
Last October, Abu Dhabi Investment Authority (ADIA) became the first institutional investor in NIIF’s Master Fund and a shareholder in the NIIF’s investment management company. Contributions were also made from four Domestic Institutional Investors (DIIs) via HDFC Group, ICICI Bank, Kotak Mahindra Life and Axis Bank.
Calling it a significant milestone, Economic Affairs Secretary Subhash Chandra Garg said that NIIF will create significant economic impact through investment in commercially viable infrastructure development projects.
India & UK to work together
In April 2017, India and the United Kingdom announced an anchor investment up to £120 million each in the Joint Fund which under the NIIF framework. The JV is aimed to leverage private sector investment from the City of London to invest in green infrastructure projects in India.
Creation of NIIF
In December 2015, the Narendra Modi government had approved the creation of NIIF with an aim to maximize economic impact through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects. The government is also considering investments in third-party managed funds focused on clean energy, affordable housing and medium-sized infrastructure companies. A team of 12 staffs is looking at operations of the fund.