A group of investors led by IDFC Private Equity and including its parent, Infrastructure Development Finance Company, its affiliate, IDFC Investment Advisors, and private equity firms Argonaut Ventures and Ascent Capital has agreed to invest INR4.65 billion (€81.8 million; $99.7 million) in India’s GMR Energy for an undisclosed stake.
“The Indian power generation sector represents an attractive investment opportunity given the current supply-demand imbalance,” Rajiv Lall, managing director and chief executive officer of IDFC, said in a statement.
GMR Energy, a subsidiary of Bangalore-based infrastructure major GMR Infrastructure, is engaged in power generation, transmission and distribution. The company will use the capital to expand its power generation capacity from 808MW to more than 6,500MW over the next few years, GMR said in a statement.
In April this year, GMR Energy had raised $200 million from Singaporean sovereign wealth fund Temasek Holdings.
IDFC Private Equity made the investment from Fund III, which closed on its $700 million hard cap in 2008.
The firm is India’s largest infrastructure-focused private equity manages with $1.3 billion across three funds. It was an earlier investor in GMR Energy, before subsequently swapping its stake in the energy subsidiary into that of GMR Infrastructure prior to the parent’s listing in 2006 and it later exited that investment. The firm separately invested in Delhi International Airport, but in May 2009, it completed another share swap deal with parent company GMR Infrastructure which saw it part with its stake in the airport.
Argonaut is a diversified global private equity firm with $5.5 billion in assets under management. The firm has investments in the US, China, Israel, India, Japan, Eastern Europe and Australia. In India, it has invested more than $350 million in private equity funds, public markets and unlisted companies. A few of its Indian investments include Koutons Retail, City Union Bank, Shriram EPC and VKL Spices.
Ascent Capital is Bangalore-based private equity firm formed by the erstwhile UTI Ventures team. The growth capital firm closed its third fund on $350 million in January 2010. In all, the firm manages $600 million across three India-focused funds.