CDC investing $25M in logistics services provider Pristine

UK-based development finance institution CDC Group Plc is investing $25 million (over RS 150 crore) in Pristine Logistics & Infraprojects Pvt Ltd, a New Delhi-based company involved in railway freight in rural and under-served parts of the country, it said on Thursday.

"CDC is a natural investment partner for us and this development will unlock the full potential of Pristine. We see commercial opportunities in locations where investment is historically problematic. Our business has a positive impact on industry generally in terms of cost efficiency and connectivity to larger markets, both nationally and internationally," said Rajnish Kumar, director at Pristine Logistics.

“Pristine Logistics has the potential to become one of the largest terminal operators in India in an exceptionally developmental sector and geography. Low income states in India face an uphill battle in attracting long-term private capital. Part of the reason is the lack of enabling infrastructure; so this investment will not only create nearly 1,500 jobs directly but will also create 400 shorter-term construction jobs and will contribute more widely to development," said Srini Nagarajan, CDC’s head for South Asia region.

Founded in 2008, Pristine Logistics is developing, constructing and operating greenfield rail freight terminals across northern, central and eastern India, encompassing some of the least developed regions of the country. The terminals provide handling, warehousing and transport services for businesses.

The company also plans to develop a food park in Bihar which will bring much-needed food processing, storage and modern transport services to local farming communities and will also develop 1,800 jobs.

In 2012, the firm raised around $11 million from India Infrastructure Development Fund, a fund managed by UTI Capital.

Interestingly, in 2013, CDC had roped in Alagappan Murugappan from UTI Capital, a subsidiary of UTI AMC, one of India’s largest asset management companies, as managing director for its Asia funds team. He had replaced Anubha Shrivastava who left the firm in 2012.

CDC has been an active investor in India since 1987 and is one of the major sources of capital for private equity funds in India. The company invests in India through the fund-of-fund route besides making direct investments in Indian companies.

Early this month, it invested $48 million (Rs 300 crore) to pick a minority stake in Devi Shetty-promoted multi-specialty healthcare provider Narayana Health Pvt Ltd (earlier known as Narayana Hrudayalaya Pvt Ltd).

Prior to that, CDC made $11 million equity investment in the Indian microfinance institution, Utkarsh. CDC made a number of other direct investments in India in 2014 including Ratnakar Bank and another microfinance company, Equitas.

Avendus Capital acted as the financial advisor to Pristine Logistics in the latest transaction.

(Edited by Joby Puthuparampil Johnson)

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