Road operator Ashoka Buildcon seeks $150m
Indian roads and bridges operator Ashoka Buildcon has entered talks with potential private equity and strategic investors to raise $150 million to finance seven road projects.
According to the Economic Times, Ashoka Buildcon has hired Ernst & Young India to advise on the raise, which would be funneled through its road operating division.
The company builds and operates roads and bridges across India on a build-operate-transfer (BOT) basis, as well as engineer, design and procure the raw materials for projects and collect tolls on roads and bridges. Ashoka Buildcon began operations in 1976, but prior to 1997, it was solely engaged in the engineering and construction of residential, commercial, industrial and institutional buildings.
The raise comes two months after GVK Power and Infrastructure announced potential private equity funding for its roads business. That month, SREI Infrastructure Finance also said it sought to raise a $1 billion private equity fund to also invest in areas such as roads, power and ports.
In March, UK-headquartered private 3i participated in BOT road projects operated by KMC Constructions, injecting INR5 billion ($115 million) for an undisclosed stake. Sources noted that BOT is one of the two Public-Private Partnership (PPP) models on which the National Highways Authority of India (NHAI) awards projects, and the government had so far awarded 41 projects valued at a total of INR243.9 billion.
Government estimates put India's infrastructure investment requirement at $1 trillion for the five years beginning April 2012. Losses from poor infrastructure are believed to amount to one to 2 percentage points of GDP.
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