India Resurgence Fund (IndiaRF), a joint venture between Piramal Enterprises and Bain Capital Credit, announced a $75 million (Rs 555 crore) investment in Thrissur Expressway Limited (TEL), part of Hyderabad-based KMC Constructions Ltd, a statement said.
KMC has previously raised capital from private equity investors such as Ares Investments, Sequoia Capital India Growth Investment Holdings, 3i Infrastructure, and Infrastructure Development Finance Company (IDFC).
Some of IndiaRF’s limited partners were co-investors in this deal, it said.
"The investment will be used towards restructuring of TEL’s existing debt and for last mile financing to enable project completion," the firm said in the statement.
Equirus Capital exclusively advised KMC on this transaction.
The deal comes a week after IndiaRF announced investment up to Rs 615 crore ($83 million) in formerly New Vernon Capital-backed automotive firm Setco Group.
TEL is a special purpose vehicle promoted by KMC to complete a 28 km highway project in the state of Kerala, between Thrissur and Vadakkanchery. It is a part of the National Highway that connects Kochi, Kerala and Salem, Tamil Nadu which passes through several major cities such as Erode, Coimbatore, Palakkad and Thrissur.
The highway project was awarded to TEL in 2009, for widening the existing two lane stretch to six lanes, by the National Highway Authority of India under the Design, Build, Finance, Operate, and Transfer basis, for a concession period of 20 years.
It also includes a six-lane tunnel that will result in significant efficiencies for commuting traffic while also contributing to the biodiversity of the region, the statement added.
“On completion, the project will significantly improve the connectivity between the key states of South India namely, Kerala and Tamil Nadu and will create significant efficiency as well as savings for both commercial and passenger traffic. IndiaRF has the capital and the expertise to invest in similar opportunities that will provide effective solutions that address bottlenecks in infrastructure projects of national interest, resolve issues in the capital structure of such projects, support financial institutions and create win-win situations for all stakeholders,” said Shantanu Nalavadi, Managing Director, IndiaRF.
Founded in 1970, KMC is an engineering, procurement and construction (EPC) company managed by second generation entrepreneurs and has executed various road BOT (Built-Operate-Transfer) projects.
In past, KMC has transferred two of its completed assets to international investors.
Vikram Reddy, Managing Director, KMC Constructions said the investment from IndiaRF had come at a critical juncture in project completion. “We are confident of completion of the last mile and opening the entire stretch at the earliest so that it improves the connectivity between the towns and key states of South India. We are particularly pleased that we have been able to design, build and operate a 1-km long tunnel which achieves the twin objective of improving connectivity and at the same time, contributes to the rich biodiversity of this region."