IEP invests INR1.5bn in Indian EPC company

India Equity Partners has acquired a stake in A2Z Maintenance and Engineering Services in what is the company’s third round of funding.

India Equity Partners, an India-focussed growth capital firm, has led an INR1.5 billion ($32.3 million; €21.6 million) investment in A2Z Maintenance and Engineering Services, a power infrastructure services and waste management company, for an undisclosed stake.

Baer Capital Partners, which made an INR750 million investment in A2Z in December 2007, is a returning investor in this funding round as well. The company has also received a round of funding in the past from Rakesh Jhunjhunwala, one of India’s leading traders and investors.

Of the INR1.5 billion, two-thirds is new money invested in the company while the remainder has been used for a secondary purchase of a stake from exisitng investors, Gaurav Mathur, a managing director at India Equity Partners, said in an interview.

“The power sector, waste management and facilities management have been focus sectors for us for a considerable period,” Mathur and Sid Khanna, India Chairman at India Equity Partners, said in a statement.

Existing investor Jhunjhunwala said the equity infusion will further the company’s interests in engineering, procurement and contracting (EPC), waste management and renewable energy, and position the company for future growth.

Baer Capital made the investment from the $200 million Beacon India Private Equity Fund which is focused on investments in Indian SMEs in the consumer and infrastructure sectors.

India Equity Partners manages a $350 million private equity fund that closed in December 2006 and makes growth-oriented investments in the range of between $20 million and $250 million per transaction. Deals larger than $50 million rely on additional capital from co-investors and partners.

The firm has made seven investments thus far and a little less than half the fund's capital has been deployed, Mathur said.

Some of the fund’s past investments include Ikya Human Capital Solutions, an HR solutions company; Bharti Infratel, a telecom infrastructure subsidiary of Indian telecom giant Bharti Airtel; Mannapuram Group, a non-banking finance company based in southern India; steel-manufacturer Jai Balaji; and Ocean Sparkle, a port management company.

India Equity Partners manages $2.2 billion for making investments in Indian real estate, private equity and public equity. It has offices in Mauritius, Mumbai and New York.