Two funds managed by IL&FS Investment Managers (IL&FS Private Equity), one of India’s largest PE firms managing assets of $3.2 billion, have acquired stake in IL&FS Energy Development Company Ltd – a firm engaged in the operation and maintenance of power generation, transmission and distribution projects. The stake has been picked up by Standard Chartered IL&FS Asia Infrastructure Growth Fund Company Pte Ltd and IL&FS Infrastructure Equity Fund I for Rs 230 crore.
An IL&FS PE spokesperson declined to comment when contacted by VCCircle, stating that the CEO & executive director Dr Archana Hingorani was travelling. Amarchand & Mangaldas was the legal advisor on the transaction. The deal was closed by October-end this year.
Incidentally, this is not the first time when the private equity firm is investing in a group company. Standard Chartered IL&FS Asia Infrastructure Growth Fund has also invested in IL&FS Transportation Networks, which was listed last year, with the PE firm’s investment at over 2x unrealised gains at one point. IL&FS Transportation is also backed by PE firms like Goldman Sachs and Bessemer Venture Partners.
IL&FS Energy Development, a subsidiary of IL&FS, plans to set up projects with aggregate capacity of over 15,000 MW across conventional and non-conventional energy space. The company plans to develop greenfield projects and acquire substantial stake in existing operational assets.
Two of its main projects include 726 MW Tripura gas power project along with ONGC, which is expected to cost Rs 3,430 crore. Another is 3,600 MW Cuddalore power project in Tamil Nadu, which is expected to cost Rs 15,000 crore. The imported coal-based power project is coming along with a captive port and a desalination plant. Another project in the pipeline includes 4,000 MW Nana Layja power project in Gujarat.
IL&FS Energy Development is also setting up biogas power projects in Maharashtra and establishing wind farms aggregating to 1,005 MW across seven states in a phased manner. Two sites in Rajasthan (38.4 MW) and Tamil Nadu (12 MW) are operational since September 2010, with further projects coming up in Rajasthan, Tamil Nadu and Madhya Pradesh. It also holds a stake in Shalivahana Green Energy, which is developing clean energy projects of 345 MW.