India's Ind-Barath Power Infra Ltd, a power infrastructure developer, is in talks to raise about $150 million from TPG Capital and Apollo Global Management, two sources with direct knowledge of the discussions told Reuters.
The company is talking to the private-equity companies after it shelved plans for an initial public offering due to a sharp plunge in the stock markets, said the sources, declining to be named as the information is not public yet.
Ind-Barath, which currently operates eight power projects across the country, will use the private-equity funding to launch new projects and increase its power generation capacity, the sources said.
TPG declined to comment, while Ind-Barath and Apollo did not respond to emails seeking comment.
Ind-Barath had filed a draft prospectus last year with the Indian market regulator to raise more than $200 million in the IPO. The main stock index has fallen more than a fifth this year, forcing many firms to put off share sale plans.
UK-based private-equity firm 3i Group had said in March its India infrastructure fund was investing about $45 million for a minority stake in Ind-Barath Energy (Utkal) Ltd, a subsidiary of Ind-Barath Power Infra.
Ind-Barath has total power generation capacity of 376 mega watts and is currently setting up four new power projects that will increase its generation capacity by 1,829 MW, according to the company's website.
It is also planning to develop two more coal-based thermal power projects and one gas based power project, with a combined generation capacity of 1,339 MW.
TPG, a US-based firm founded in 1992, currently invests in Asia from a $19.8 billion global fund and its $4.25 billion regional fund TPG Capital Partners V, both of which raised their investment capital in 2008.
Private-equity investors are poised to play a faster-growing role in financing much-needed infrastructure projects in a country infamous for clogged roads and power outages and lacking a mature local bond market to provide long-term project funding.
Private-equity investment in infrastructure in India has grown from about $1 billion in 2006 to $4 billion last year, a recent Bain & Company report found, predicting activity could grow 25 to 50 percent a year over the next three years.
The largest infrastructure-related PE deal in India was a $982-million investment in 2009 by a consortium led by IDFC India Infrastructure Fund in a power project, built by GMR Energy, in Orissa state, according to research firm Preqin.
Private-equity investments in India have risen this year, as rising borrowing costs and dormant public markets push companies to cut deals with buyout firms in return for much-needed cash injections.
Investments by private-equity firms in India rose 31 percent to $7.9 billion in the first three quarters of 2011 over the same period a year ago, according to data from research and consultancy firm KPMG.