Canada's CPPIB commits $322m to Indian infrastructure

The investment will be split into two tranches of INR10 billion, with the second tranche due 12 months after completion of the first. CPPIB will subscribe to preference shares in the L&T unit, which will convert into a minority equity stake.

The L&T infrastructure division owns the largest toll-road concession portfolio in India, including 19 roads spanning over 2,200 kilometers, connecting some of the most important cities, ports and economic corridors in India. It also owns a power transmission line project and a metro project in Hyderabad. The company primarily operates under a public-private-partnership model.

"This transaction represents CPPIB's first investment in India's infrastructure sector with a highly reputable partner and fits well with our strategy for India as a key long-term growth market," said André Bourbonnais, senior vice president for private investments at CPPIB, in a statement. "We look forward to partnering with L&T and L&T IDPL's experienced management teams as we build our infrastructure platform in India over the long term."

Larsen & Toubro is a conglomerate worth $14.3 billion with assets covering technology, engineering, construction, manufacturing and financial services. It operates in more than 30 countries. The company reported a net profit of INR52 billion for the 2013 financial year, up from INR47 billion the previous year. Gross revenue from operations was INR752 billion, up from INR650 billion.

CPPIB has approximately C$219.1 billion ($204.4 billion) in assets under management, of which 15% is deployed in Asia. Business in the region as a percentage of active assets committed is 40% real estate, 20% private equity, 10% infrastructure and the remainder in hedge funds and other strategies.

Speaking to AVCJ last month, Mark Machin, CPPIB's Asia president, said it was still early days for the pension fund in the region, across all asset classes. "On infrastructure we are just scratching the surface - we are pretty active in Australia, just starting in India, and not looking anywhere else right now," he said.

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• Topics
• Infrastructure
• Infrastructure
• South Asia
• CPPIB
• Infrastructure
• India
• Growth capital