Piramal Enterprises is close to sealing half a dozen deals to buy majority stake in a clutch of road assets for around Rs 2,000 crore ($333 million), as per a report by The Economic Times citing the co-chief of the firm’s infrastructure investment practice.
This marks first big investment in infrastructure space post the formation of new government at the centre.
"We have signed term sheets to acquire four road projects. Two more are in the offing. In all these cases, we are looking to buy more than 51 per cent to take management control with an investment horizon of six years. We expect to close these transactions by the end of this fiscal," said Parvez Umrigar, co-head, structured investment group, Piramal Enterprises.
In a separate statement to Reuters he said the firm has earmarked Rs 5,000 crore to buy such assets.
He also said that of the six targeted assets, three are located in the south and the rest are in other parts of the country. He did not share names of the assets.
The company, which recently brought its real estate private equity arm and NBFC under a single umbrella Piramal Fund Management, invests in infrastructure out of a different unit.
This unit has made investments in Hyderabad-based Navayuga Engineering Co and Green Infra.
The firm had recently struck a significant partnership with SBI Capital for infrastructure related assets. State Bank of India’s investment banking arm SBI Capital Markets and Piramal Enterprises signed a Memorandum of Understanding (MoU) to co-operate on opportunities in acquiring controlling stakes in Public-Private-Partnership (PPP) road assets where many developers are looking at hiving off their completed or near completion assets to repair their balance sheets.
SBI Capital will give first preference to PEL on all the road asset projects it advises. The investment bank would also assist PEL in obtaining necessary approvals for closing such transactions.
Given SBI Cap’s dominant position in advisory services for such projects it gives Piramal Enterprises a strong pipeline for investments in the future.
(Edited by Joby Puthuparampil Johnson)