Sabre Abraaj invests in Indian infrastructure company

The private equity firm has bought a minority stake in ECI Engineering and Construction Company as India’s infrastructure sector continues to draw private equity investments.

India-based private equity firm Sabre Capital and the Middle Eastern investment firm Abraaj Capital have invested $25 million in ECI Engineering and Construction Company in India through Sabre Abraaj, a joint venture between the two firms.

ECI Engineering and Construction is an infrastructure development and construction company active in the areas of roads, railways, power generation and transmission, hydro-electric power plants, irrigation and industrial construction.

Vijay Kaza, managing director of ECI, told PEO that the capital infusion will be used to finance hydro power projects, to expand its construction activities in the power sector, and to finance a tower fabrication facility that the company is looking to set up.

The investment “will help us emerge as a focussed and integrated player in the Indian infrastructure industry,” said Venkat Rao, Chairman of ECI, in a statement.

Kaza told PEO that a few other institutions had expressed an interest to invest in ECI as well. Though the interested parties included larger investors such as big US banks and other private equity funds, ECI preferred to partner Sabre Abraaj. This was because ECI wanted to go with someone who would play an active role in helping the company grow, as opposed to larger investors who are often concerned only about making returns, Kaza said.
He said the fund has taken a minority stake in the company, but refused to elaborate on the financial details.

Rajiv Maliwal, co-founder of Sabre Capital, will join the Board of Directors of ECI and represent Sabre Abraaj.

The investment in ECI has been made through the $300 million Sabre Abraaj India Private Equity Fund I. This is the second investment that Sabre Abraaj has made in the Indian infrastructure sector. Last year, it invested $17 million to acquire a strategic stake in Ramky Infrastructure, another integrated infrastructure development and management company.