US-based infrastructure-focused private equity firm I Squared Capital is investing $300 million (Rs 2,228.8 crore) equity capital in AG&P City Gas, a Singapore-based company that is developing 12 city gas distribution networks or concessions in India under the brand name AG&P Pratham.
I Squared Capital, through its ISQ Global Infrastructure Fund III and ISQ Growth Markets Infrastructure Fund, has invested approximately $200 million (Rs 1,485.7 crore) as a first tranche of a $300 million equity raise in AG&P City Gas, the private equity firm said in a statement.
Earlier, the AG&P City Gas was wholly owned by the Atlantic, Gulf & Pacific Group (AG&P), a Singapore-based downstream LNG business.
The 12 gas distribution networks or concessions are being developed across 280,000 square kilometres, an area approximately the size of Italy, it said.
They are being developed in the states of Rajasthan, Andhra Pradesh, Tamil Nadu, Karnataka and Kerala.
In its 12 concessions, AG&P City Gas is responsible for developing and operating Compressed Natural Gas (CNG) stations for vehicles, piped natural gas to homes and distribution of Liquid Natural Gas (LNG) to industrial and commercial customers.
City gas projects benefit from marketing exclusivity in their designated areas for eight to ten years and construction exclusivity of related infrastructure for 25 years.
“Along with AG&P, I Squared Capital was one of the early foreign institutional investors in the Indian city gas sector and is committed to helping the country achieve its target of having 15% of natural gas in its primary energy mix by 2030," Gautam Bhandari, managing partner at I Squared Capital, said.
“We plan to deploy up to $1.3 billion in Capex to build out the distribution networks,” he further said.
The transaction is the second gas distribution network for Miami, Florida headquartered I Squared, after the THINK Gas platform developed around four years ago.
This firm has six licenses to operate across 11 districts in India in the states of Punjab, Madhya Pradesh, Bihar and Uttar Pradesh.
AG&P City Gas is one of the largest private City Gas Distribution (CGD) companies in India.
“The concessions cover some of the fastest growing cities in India such as Jodhpur, Kanchipuram, Mysore and Thiruvananthapuram.
AG&P City Gas and THINK Gas are geographically complementary and will operate as independent companies with separate management teams,” Harsh Agrawal, Partner at I Squared Capital based in Singapore, said.
The two companies form one of the largest private city gas portfolios in India with 18 concessions serving approximately 85 million people across nine states with a planned capital expenditure of over $1.3 billion for AG&P City Gas.
I Squared Capital is an independent global infrastructure investment manager with over $13 billion assets under management (AUM) providing growth capital to companies operating globally primarily United States of America, Europe and Asia.
It focuses on utilities, digital infrastructure, transport, energy, and social infrastructure and has offices in Hong Kong, London, New Delhi and Singapore.