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India’s IL&FS, IDFC see 2.6x return on gas distributor exit

  • Mirzaan Jamwal
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IDFC Private Equity, the Asian Development Bank (ADB) and a subsidiary of IL&FS Investment Managers have sold their stake in Central UP Gas (CUGL) in a strategic sale to Indraprastha Gas. The investment generated a gross IRR of 17% and a money multiple of 2.6x, including dividends over a 6 and a half year hold period.

CUGL operates a gas distribution network in the Indian cities of Kanpur and Bareilly, delivering compressed natural gas (CNG) to vehicles and piped natural gas (PNG) to commercial, industrial and residential users.

The investment was made in December 2006, with IL&FS and IDFC each aquiring a 15% stake for INR90 million ($1.5 million), while ADB put in INR120 million for a 20% stake. Indraprastha bought the stake at INR23 per share.

IL&FS made the investment from its $45 million Pan Asia Project Development Fund (PAPDF) The fund invests in infrastructure projects and concepts at the project development stage.

It has committed to seven investments in sub-sectors such as gas distribution, logistics, e-governance and waste management, for a total of $39 million.

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