Private equity fund Standard Chartered IL&FS Asia Infrastructure Growth Fund has bought a minority stake of less than 5% in Ramky Enviro Engineers Ltd (REEL), a waste management company belonging to the Rs2,500 crore Ramky Group, by investing Rs200 crore.
REEL, which posted revenue of around Rs300 crore for the fiscal year ended March, is engaged in industrial, municipal and biomedical waste management, and has 12 subsidiaries across 28 locations in India, West Asia and Singapore.
StanChart IL&FS Fund invests in the infrastructure sector, including transportation, energy, power, water, environment, telecom and urban infrastructure. The fund has a primary focus on the rapidly growing Indian market.
Hyderabad-based Ramky Group chairman A. Ayodhya Rami Reddy said the waste management company is currently executing some Rs4,000 crore worth of projects over the next 30 months.
“The StanChart IL&FS Fund has valued the company at some Rs4,400 crore, and picked up fresh equity of 3.39% at Rs175 crore and 1.26% of promoters’ stake at Rs25 crore,” said Reddy. REEL currently has paid-up equity of Rs4.17 crore.
The fund, in turn, would issue convertible preference shares to its investors, where the instruments would be converted into equity over the next three years.
“REEL would consider going public over the next three-five years to raise funds required for its growth, which would also provide an exit route to the private equity investors,” said Reddy.
REEL owns 15 biomedical waste disposal facilities, 12 facilities to manage hazardous waste and five municipal solid waste management facilities.
Source: Livemint