Olympus Capital Holdings Asia has acquired a significant minority stake in Vishwa Infrastructures and Services Pvt Ltd from Axis Infrastructure Fund 1 for Rs 240 crore or $50 million. Hyderabad-based Vishwa Infrastructures is an infrastructure development company with expertise in developing and executing integrated water supply and wastewater projects.
New Enterprise Associates (NEA), which invested Rs 100 crore in Vishwa through a fresh infusion in February this year, has also picked up stake in this transaction where Axis has sold its 35.6 per cent stake. Incidentally, Axis had invested Rs 60 crore in 2008.
According to a statement, Olympus and NEA will have an equal stake in Vishwa after this deal.
Olympus’ investment will come through $250 million renewable energy and environment-focused fund Asia Environmental Partners, besides its regional funds. Asia Development Partners III, L.P., a fund managed by Olympus on behalf of Overseas Private Investment Corporation (OPIC), is participating in this investment as well. MAPE Advisory Group was the advisor to Olympus Capital in the deal.
For FY11, Vishwa Infrastructures reported 47 per cent increase in turnover to Rs 600 crore, with profit before taxes rising 42.7 per cent to Rs 63.8 crore, according to its website. Established in 1992, Vishwa has backward integration into pipe manufacturing.
One of Vishwa’s subsidiaries executing a public-private partnership (PPP) project in clean water and sewage treatment recently got $5 million in debt from the World Bank arm .
“Vishwa has the depth and the domain expertise needed to capitalise on the significant and growing opportunities in the water and wastewater sectors in India. We believe that designing and developing solutions for one of India’s most significant challenges – water – is an important societal priority and a compelling investment opportunity for the coming decade,” said Gaurav Malik, managing director at Olympus whose other Indian investments include renewable energy firm Orient Green Power and Raman Roy’s Quatrro BPO Solutions.
Municipal water and wastewater is a fast-growing segment and it is expected to be valued at $42 billion over the next five years, with transmission and distribution accounting for 70-75 per cent of the value chain opportunity. The annual per capita spending on water and sewage treatment in India is significantly lower than that of China and other developed countries, according to a statement from Olympus.
The sector has been on the radar of venture capital and private equity firms for some time now. Recent investments include Aditya Birla’s Sunrise Fund investing Rs 40 crore in SMS Paryavaran, Matrix Partners baking Chetas Control Systems with Rs 60 crore and Nexus infusing Rs 9 crore in Greywater Technologies.