3i India invests $61m in Supreme Infrastructure
3i India will pay $61 million for a minority stake in a portfolio of four road companies held by Supreme Infrastructure India (SIIL), a Mumbai-based infrastructure company. The private equity firm will take a 49% stake in SIIL's subsidiary Supreme Infrastructure BOT Holdings.
The investment is being made from 3i's $1.2 billion India Infrastructure Fund. Launched 2007, the vehicle focuses on power, ports, airports and road projects. This latest transaction takes spending to $900 million, of which almost one quarter is in roads.
Commenting on the deal, Anil Ahuja, managing director and head of 3i Asia, said that the private equity firm was attracted by SIIL's strong track record and its access to high quality road BOT (build-operate-transfer) projects. "We are in active discussions with other road developers for more such investments," Ahuja told The Economic Times.
Founded in 1983, Mumbai-headquartered SIIL undertakes engineering works with government departments, public and private sector organizations. The company has a portfolio of eight road projects that is executing on a BOT basis under the public-private partnership model.
SIIL is relying on 3i's global experience to boost its domestic expansion. "This investment would be enough to drive our growth. Our projects would soon start generating cash and that will help us for future projects," said Vikram Sharma, managing director of the company.
India's infrastructure sector has been a key source of investment opportunities among private equity players. Following the strong performance of the India Infrastructure Fund, 3i is looking to raise at least the same amount for its successor.
Last October, Macquarie Group and State Bank of India (SBI) also set a $1-1.5 billion target for their second India-focused infrastructure fund, while SREI Infrastructure Finance is reportedly seeking $1 billion to invest in areas such as roads, power and ports. However, earlier this month, Nomura postponed the launch of its $500 million India-focused infrastructure fund due to the uncertain economic environment.
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