SEW Infrastructure Ltd, an engineering, procurement and construction (EPC) company in Hyderabad, is raising Rs 152 crore from Jacob Ballas private equity. The investment has been made through NYLIM Jacob Ballas India Fund III, LLC, a Mauritius-based private equity vehicle dedicated to India.
SEW plans to utilise the fund to meet capital expenditure and working capital requirements, and also to part-finance its five hydel power projects being developed in separate SPVs, it said in a statement. Citi Venture Capital International (CVCI), the investment arm of Citigroup, is an existing investor in the firm since 2007.
V Rajasekhar, managing director, SEW, said, in the statement, “considering the huge potential for growth in the infrastructure sector in India, we are extremely bullish about the opportunities in the EPC and BOT space”. He further added that the funding will help them bid for larger projects in this sector.
The hydro power projects will be developed on build, operate and transfer (BOT) basis, and are located in the north eastern state of Arunachal Pradesh. The total capacity of the projects will be around 564 MW.
Following this investment, Sunil Chawla, partner, Jacob Ballas Capital India Pvt Ltd, the investment advisor to the fund in India, has joined the SEW board. Daiwa Capital Markets has acted as advisor to SEW on this transaction.
SEW focuses on the irrigation and hydropower segments, and also has presence in the roads and urban infrastructure space. The company has been diversifying its operation from pure play EPC to other areas to become an integrated infrastructure company.
It also has minority stake in two other hydro power projects in Sikkim, with a total capacity of 186 MW. These projects are expected to be commissioned over the next 4-7 years. It also holds a 74.0% stake in a highway BOT project in Madhya Pradesh, which will be commissioned by May 2011. The company is expecting a turnover of Rs 1,825 crore for 2009-2010, the statement added.
Delhi-based Jacob Ballas Capital India Pvt Ltd, registered as an NBFC (non- banking finance company), now manages $600 million of capital across three funds. The other two funds are New York Life International India Fund (Mauritius), LLC and New York Life Investment Management India Fund II LLC. The fund’s limited partners are from the US, Middle East, Japan, Europe and Asia ex-Japan.
The other investments of the fund include Aster Teleservices Ltd, Mahindra Holidays & Resorts India Ltd, Saravana Global Energy Ltd, Inventia Healthcare Ltd and Financial Software and Systems Ltd.
Clearly, deals are coming back particularly where infrastructure is the central theme. Nitin Bhasin, Head, Infrastructure, Noble Execution Group, said, while the government has announced plans for infrastructure investment of $1 trillion over FY12-17 (2X the amount for FY07-12), it needs to fill critical gaps in planning, policies and procedures before such magical numbers can be hit. About 50% of this $1 trillion will be met by private sector schemes.
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