Private equity action in infrastructure allied services seems to continue unabated. Fidelity Growth Partners India (FGPI) has taken a significant minority stake in PL Engineering, a subsidiary of Punj Lloyd Limited, a leading global engineering, procurement and construction conglomerate.
Raj Dugar, Senior Managing Director of FIL Capital Advisors (India), the private equity advisory company for FGPI, has joined PL Engineering’s Board of Directors. The monies will be used by the company in expansion of the businesses in North America and the Middle East. The amount of investment is not disclosed. Fidelity typically makes investment in the range of $10 million to $50 million across companies in a sector-agnostic approach.
PL Engineering was initially set up to provide high-end engineering and design services for its parent company Punj Lloyd. It now provides design and engineering services that cover all stages of the project and product lifecycle to third party companies. Its services include feasibility studies, front end design, detail design, analysis and stimulation. The company currently has 800 employees across delivery centres in Gurgaon, Hyderabad and Abu Dhabi working in a global work share environment, enabled by state-of-the-art IT infrastructure. Over the last few years the company has aggressively built up its client base, which includes global companies across North America, Europe, Middle East and India, it said in a statement.
Fidelity's other investments include Software Services Pvt. Ltd (application Software), Vuppalamritha Magnetic Components Ltd. (heavy electrical equipment company), BAG Films & Media Ltd. (movies & entertainment) and Avesthagen Ltd. (biotechnology).
Action In "Infrastructure Enablers"
With infrastructure slated for high growth and PE funds, which cannot make investments in core infrastructure owing to their "growth equity" nature, a lot of action is seen in the ancillary or "infrastructure enabler" space. Recently, Clearwater Capital hiked its stake in Diamond Cables by purchasing 2.2% stake for around Rs 10 crore through the secondary market which takes its total holding to 13.77%. Originally an electrical products maker, the company has diversified into a manufacturer of power transmission equipment and turnkey services provider (EPC).
NYLIM Jacob Ballas India Fund III, LLC, a Mauritius-based private equity vehicle dedicated to India, infused Rs 152 crore into SEW Infrastructure Ltd, an engineering, procurement and construction (EPC) company in Hyderabad. Axis Private Equity already has investments of Rs 126 crore in Delhi-based railway line manufacturer Harish Chandra India Ltd (HCIL) and Rs 60 crore in Vishwa Infrastructures and Services, which executes projects in the water supply and sanitation sector.
Clearly, deals are coming back particularly where infrastructure is the central theme. Nitin Bhasin, Head, Infrastructure, Noble Execution Group, said, while the government has announced plans for infrastructure investment of $1 trillion over FY12-17 (2X the amount for FY07-12), it needs to fill critical gaps in planning, policies and procedures before such magical numbers can be hit. About 50% of this $1 trillion will be met by private sector schemes.