Global private equity funds are set to drive on Indian roads. At least half a dozen PE firms, including Goldman Sachs, Lehman Brothers, Citigroup and few Gulf-based funds are keen on making a foray into the domestic road sector. Experts say funds worth $1-1.5 billion may be invested in the next 6-8 months. This would be the first time PE investments of such magnitude would flow into the sector.
Goldman Sachs recently picked up 5% stake in IL&FS Transportation Networks Limited (ITNL) for a consideration of $20 million. ITNL is a vehicle promoted by IL&FS to spearhead its initiative in the roads sector.Industry experts say PE firms are in talks for investing in public-private partnerships (PPP) projects in which revenue stream has been fixed and identified.
Construction companies are in discussion with PE funds for jointly investing in road projects through the SPV route. Investment bankers say deals in southern and western parts of India are being discussed and some of these are in the range of $50-80 million. Several Gulf-based funds which have global expertise in managing road projects are also learnt to be interested in picking equity in Indian road projects.
Read more in The Economic Times article.
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