3i invest $182m in Indian power firm

Indian firm GVK has sold a 21.1% stake in its energy business to 3i Infrastructure and a second buyer for $260m. 3i will pay $182m, amounting to around a 16% stake in GVK, with the other investor covering the remaining.

Indian infrastructure developer GVK Power and Infrastructure has sold a 21.1 percent stake in GVK Energy, the company’s wholly owned energy business, to 3i Infrastructure and a second buyer.

The sale netted GVK a total of INR12 billion (€194 million;$260 million). 3i and GVK said that 3i will invest $182 million of the total amount for around 16 percent of the 21.1 percent stake being sold but did not disclose who the other buyer was.

This is one of the largest investments made by the $1.2 billion 3i India Infrastructure Fund. The fund, established in 2007, has already invested $227 million in Adani Power, $101 million in Soma Enterprises, a road infrastructure company, and $161 million in the Krishnapatnam port in South India.

Last month GVK announced plans to raise a total of $600 million in private equity funding for its airport and energy businesses. The company’s energy business currently has a power generation capacity of 901 megawatts with a further 4,200 megawatts in various stages of development.

GVK, which already operates airports in Mumbai and Bangalore, plans to bid for a proposed international airport in New Mumbai and is reportedly seeking opportunities overseas.

GVK has invested more than INR50 billion in infrastructure projects across India’s power, airport and road sectors. It also has interests in the country’s hotel, services and manufacturing sectors.