CLSA Capital Partners has invested $15 million in New Delhi-based Earth Water Group (EWG), a player in the water and wastewater management industry. A statement said that CLSA Capital Partners will pick up close to 20 per cent stake, which would imply an approximate valuation of $75 million. The funds will be used to invest in better technologies, strengthen existing core initiatives and acquiring new businesses.
Sanjeev Krishnan, director at CLSA, has joined the board of Earth Water Group. The investment has been made by CLSA Capital's Clean Resources Asia Growth Fund, which has a mandate to invest in clean technology. CLSA Capital Partners, which has $2.6 billion under management, is the alternative asset-management arm of Asia’s leading independent brokerage and investment group, CLSA Asia-Pacific Markets.
Earth Water Group consists of three companies in the water sector. Fontus Water Pvt. Ltd executes water and waste water treatment projects for industries, buildings and municipal segments. Aventura Components Pvt. Ltd supplies water & wastewater treatment components to OEMs across India. EA Water Pvt. Ltd the knowledge and marketing platform for the water sector, offers publishing, events, consulting and recruitment consulting services under the EverythingAboutWater brand.
"The fund will be used to strengthen existing core initiatives and for acquiring attractive and complementary businesses. It will also enhance the risk appetite of the company to take innovative and path-breaking means to redefine the Indian water industry, while also allowing us to enter new areas like zero liquid discharge and desalination," said Sunil Ghorawat, founder and Managing Director of Earth Water Group.
“Water is a core area for our fund and we have been looking for several years for the right partner in India. We looked at various business models in the Indian water sector and felt that Earth Water Group is the best suited opportunity to provide long-term professional management, national reach, strong customer relationship and a healthy order book, which places it in a strong position to be a market leader in the water sector," said Peter Kennedy, Managing Partner, CLSA.
India's water shortages have risen primarily due to increased water demands and deteriorating water quality as a result of domestic sewage and industrial effluents, said the statement, pegging the market size at Rs 60,000 crore.
Water and waste water sector has been on the radar of venture capital and private equity firms for some time now. Most recently, International Finance Corporation (IFC) agreed to invest up to $24 million (Rs 120 crore) in IDFC Private Equity-backed water management
company Doshion Ltd.
Aditya Birla’s Sunrise Fund invested Rs 40 crore in SMS Paryavaran, Matrix Partners' Rs 60 crore investment in Chetas Control Systems and Olympus Capital Holdings Asia’s investment of Rs 240 crore in Vishwa Infrastructure.
(Edited by Prem Udayabhanu)