Standard Chartered Private Equity (SCPE) has invested Rs 250 crore ($45 million) to pick up a minority stake in Vadodara-based Inox India Ltd (INOXCVA), a manufacturer of cryogenic storage and transportation equipment.
Cryogenic storage equipment is a precision engineering product used for storage and distribution of liquefied gases used in industrial applications. The growing use of shale gas as a fuel source has also resulted into strong demand for cryogenic storage equipment for liquefied natural gas (LNG) across the globe, especially in the US. Inox claims to be the largest player in India and one of the top five global players in cryogenic equipment manufacturing business.
The privately held company plans to use the money for its organic expansion plans and potential acquisitions.
Mukul Nag, managing director of Standard Chartered PE, said, “The unprecedented shale gas supplies in the US are driving the use of LNG as a cheap and clean fuel in transportation and industrial applications. We are excited to partner INOXCVA as the company capitalises on the opportunities presented in the global market and develops into a multi-national corporation.”
Yes Bank acted as the transaction advisor for Inox India while Khaitan & Co. and Wadia Ghandy & Co. were the legal advisors for INOXCVA and SCPE, respectively.
INOXCVA is part of the INOX group, which is into various businesses – from industrial gases, cryogenics, refrigerants, chemicals and renewable energy to family entertainment (multiplexes). Its group companies include Inox AP, CVA, Gujarat Fluorochemicals, Inox Leisure (and Fame India) and Inox Wind.
Three years ago, Inox India had acquired US-based Cryogenic Vessel Alternatives, Inc., one of the top global players in large cryogenic transport tanks, oil & gas field pumping units and mobile LIN storage units, for $140 million. In India, it has manufacturing plants located at Kalol (near Vadodara) and Kandla (near Gandhidham).
This is Standard Chartered PE’s third investment in the past two months and the second in engineering space. Earlier this month, it invested $15.3 million in IFC-backed Craftsman Automation, a multi-product light engineering company.
In June this year, Standard Chartered PE had invested $23 million in Marg Karaikal Port, which is developing a port on the south-east coast in Pondicherry. The investment involved a mix of subscription to fresh shares and secondary purchase of shares.
Interestingly, the PE firm has been particularly active in the light engineering and infrastructure businesses.
(Edited by Sanghamitra Mandal)