Canada Pension Plan Investment Board (CPPIB) has invested Rs 1,000 crore (around $157 million) in L&T Infrastructure Development Projects Ltd (L&T IDPL), a unit of Larsen and Toubro Ltd (L&T), by way of subscription to compulsorily convertible preference shares, as per a stock market disclosure.
The investment, made through CPPIB’s Singapore-based wholly owned subsidiary, is the first tranche of proposed Rs 2,000 crore (around $314 million now) investment that was approved by the Foreign Investment Promotion Board (FIPB), the nodal government body monitoring foreign investment in the country, earlier this year.
The two companies signed a definitive investment agreement in June this year.
“A second tranche of Rs 1,000 crore or such higher amount as may be agreed between L&T IDPL and CPPIB’s subsidiary, will be invested after 12 months from the date of the initial investment, subject to any required regulatory approvals at such time,” L&T said in the statement.
This is the first direct private investment by a Canadian pension fund into an Indian infrastructure development company, it added.
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 comprising 19 road projects, two ports, the Hyderabad metro rail project, a power transmission line project and a wind energy project.
CPPIB, a C$234.4 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.
Earlier this year, 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.
(Edited by Joby Puthuparampil Johnson)