IDFC teams with corporates to launch Indian infra JV

Ashok Piramal Group will take a 51% equity stake in the JV, called Piramal Roads Infra, while the IDFC-managed India Infrastructure Fund will have a 39% stake, and SNC-Lavalin will take 10%. In total, the parties are slated to invest $250-300 million in equity in the JV over the next 3-5 years, which will enable it to contribute to road projects worth $1 billion.

"Together with APG and SNC-Lavalin, we believe that we have put in place the foundations for an aggressive and profitable growth in the Indian roads' BOT (build, own, transfer) business and hope to have a portfolio of projects in excess of $1 billion over the next three to four years," Aditya Aggarwal, managing director of the India Infrastructure Fund, said in a statement.

Ashok Piramal's Vice Chairman Rajeev Piramal noted that the groups would consider a listing for the JV in the future.

Roads and highways has been a popular investment destination for private equity in the past year, given the sector's need for private funding. India's National Highways Authority has previously said that $12 billion will be invested in highway construction projects in 2011, and it looks to invest $1 trillion to 2017 for these projects. However, estimates state that 50% of the necessary commitment to meet demand for these infrastructure projects will come from the private sector.

Examples of these include Ashoka Buildcon and GVK Power & Infrastructure, which both want to tap PE sources for capital for their road projects, while 3i Group took a $115 million stake in similar projects run by KMC Construction.

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• Topics
• South Asia
• Infrastructure
• IDFC Private Equity
• India
• Infrastructure
• Joint Venture