India focused investment firm Infrastructure India Plc is reportedly picking up 49% in road construction firm Oriental Tollways for Rs 450 crore ($90 million). Infrastructure India is a closed ended infrastructure investment firm which got listed at London Stock Exchange in June this year. Its investment advisor is Bloomsbury Asset Management Advisors, led by Gary Neville who was previously with John Laing – one of the largest publicly quoted infrastructure investors in the UK (it was acquired by Henderson in December 2006).
Oriental is part of New Delhi-based privately-owned Bakshi Enterprise. Oriental Structural Engineers (OSE), Bakshi Enterprise's infrastructure arm, is undertaking several road and highway projects across the country and will transfer its interests in all these projects to the new company Oriental Tollways, according to this report.
The investment in Oriental Tollways routed through a Mauritius-based subsidiary will come in tranches.
The transaction will value Oriental Tollways at Rs 918 crore. It comes at a time when real estate and construction sector has been hit hard by the credit crunch and stock market meltdown. It is one of the largest such investments in the sector over the last two months.
Oriental is executing highway projects under the Golden Quadrilateral wing of the National Highway Development Programme (NHDP) in states of Uttar Pradesh and Tamil Nadu. The projects are worth Rs 830 crore. It is also undertaking the Allahabad Bypass Project and is involved in four-laning of highways in UP and Madhya Pradesh. The projects are worth Rs 530 crore and Rs 260 crore, respectively.
Bakshi Enterprise, its parent company, has revenues of Rs 1,500 crore and has various businesses, including aluminium castings, auto components and real estate development through separate privately held firms.
Infrastructure India's mandate is to invest in Indian energy and transport infrastructure projects. It already has existing investments in Shree Maheswar Hydel Power Corporation, a 400-MW hydroelectric power project located in Madhya Pradesh, among others, in India.