Canada Pension Plan Investment Board (CPPIB), through its Singapore-based wholly owned subsidiary, will invest Rs 1,000 crore ($161.4 million) in L&T Infrastructure Development Projects Ltd (L&T IDPL), a unit of Larsen and Toubro Ltd (L&T), as per a stock market disclosure.
Foreign Investment Promotion Board (FIPB), the nodal government body monitoring foreign investment in the country, had approved the proposed transaction early this month through issue of equity shares, compulsorily convertible preference shares (CCPS) and /or compulsorily convertible debentures (CCD).
“Subject to completion of due diligence processes and necessary agreement on governance and other terms of the transaction with the investor, there is a contemplation of an initial infusion of Rs 1,000 crore into L&T IDPL, followed by a second tranche of Rs 1,000 crore (or such higher amount as may be agreed between the company and the investor) after 12 months from the date of the initial investment (subject to further regulatory approvals at such time where required),” as per a company statement.
L&T IDPL is an engineering and construction company promoted by L&T. It develops highways, bridges, seaports, airports and real estate. Incorporated in 2001, it handles a portfolio of infrastructure assets worth Rs 45,000 crore comprising 19 road projects, two ports, the Hyderabad metro rail project, a power transmission line project and a wind energy project.
CPPIB, a C$192.8 billion professional investment management organisation, invests in public equities, private equities, real estate, infrastructure and fixed income instruments.
It has been active in India in the recent past. Early this month it partnered with diversified business conglomerate Piramal Enterprises Ltd to offer rupee debt financing to residential projects in major urban centres of India. The two partners have committed an initial investment of $250 million each for the same.
In November, CPPIB and Shapoorji Pallonji Group formed a strategic alliance to acquire foreign direct investment (FDI)-compliant, stabilised office buildings in the major metropolitan areas in India. CPPIB will own 80 per cent of the venture with an initial equity commitment of $200 million.
(Edited by Joby Puthuparampil Johnson)