Tata Opportunities Fund invests $55m in Tata Projects
The Tata Opportunities Fund (TOF) - the flagship fund managed by Indian conglomerate Tata Group's corporate investment arm, Tata Capital - has invested INR3.35 billion ($55 million) in the group's engineering, procurement and construction (EPC) services unit, Tata Projects.
According to a release, TOF purchased secondary stakes from four Tata companies - Tata Steel, Tata Motors, The Indian Hotels Company and Tata International - which had acquired shares in the unit following its establishment in 1979. The deal, which will give TOF a significant minority stake, marks its first investment in the infrastructure services space.
Based in Hyderabad, Tata Projects claims to be one of India's fastest-growing EPC companies with leadership positions in the power generation and power transmission segments. The business has also recently diversified into urban infrastructure and heavy civil construction, securing contracts in railways and urban transportation, including dedicated freight corridors and metro rail projects.
The company reported INR34 billion in revenue for the 2015 financial year, profit of INR2.95 billion, and an order book of over INR160 billion.
Following the investment, TOF plans to support the company as it expands its EPC services franchise with existing and new customers across different segments and geographies. It will also appoint a nominee to the company's board.
"The fund has been evaluating the Indian EPC space and is looking at a revival in the sector as it comes off a cyclical low," said Padmanabh Sinha, managing partner of TOF. "Tata Projects is one of the few EPC companies with low leverage given its ‘pure‐play' services focus and financial discipline, and is well placed to grow profitably."
TOF, which closed in 2010 with a corpus of $600 million, invests in companies both within the Tata Group network and outside businesses that can benefit from a relationship with Tata Group.
The fund's other portfolio commitments include budget hotel chain Ginger Hotels, satellite TV provider Tata Sky, auto parts maker Varroc Engineering, mid-market housing developer Shriram Properties and TVS Logistics Services.
More on South Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.