Infrastructure India, a London-listed investment fund, is close to acquiring a 49% stake in Oriental Tollways for Rs 450 crore ($90 million), attracted by the New Delhi-based construction firm’s order book of road projects, a person involved in the transaction said. Oriental is part of New Delhi-based privately-owned Bakshi Enterprises. 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. Dabur India vice-chairman Amit Burman is a shareholder in OSE in a personal capacity.
The specialist India-focussed fund will invest in Oriental Tollways through a Mauritius-based subsidiary. “The investment (by Infrastructure India) will come into Oriental Tollways in tranches,” said the person, who is directly involved in the transaction.
Infrastructure India’s mandate is to invest in Indian energy and transport infrastructure projects and comes out of its belief that the present time is appropriate to focus on infrastructure in India given the fast pace of change in its economy.
Its investment, which will value Oriental Tollways at Rs 918 crore, comes against a gloomy backdrop for the Indian infrastructure sector, which has, in the past, been hobbled by bureaucratic delays and is now a victim of tight funding conditions amid a global credit crunch, on the whole.
The fund has already invested in Shree Maheswar Hydel Power Corporation, a 400-MW hydroelectric power project located in Madhya Pradesh, among others, in India. Oriental is executing highway projects under the Golden Quadrilateral wing of the National Highway Development Programme (NHDP) in 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.
Source: Economic Times