The Asian Giants Infrastructure Fund will immediately invest Rs1 billion ($25 million) into Gayatri Infra Ventures (GIV) for a ôsignificant minority stakeö. AMP did not disclose the exact stake but Indian media has pegged it at 29%. The terms of the agreement between AMP and Gayatri envisage the Australian fund investing another Rs1 billion as and when GIV needs the money.
Gayatri Projects, an Indian construction firm, spun-off its build-operate-transfer (BOT) road arm to form GIV earlier this year. GIV is currently developing one toll road and four annuity projects and is bidding for further road projects. It has invested Rs1.25 billion to date in these projects.
"The funds will be used to meet ongoing needs of existing projects as well as future bids and concessions undertaken by Gayatri Infra Ventures," Gayatri Projects said in a filing with the Bombay Stock Exchange. It added that it could ultimately sell down up to 49% in GIV.
The Asian Giants Infrastructure Fund is a new fund floated by AMP Capital which is seeking to raise up to $750 million from institutional investors to invest in infrastructure projects primarily in India and China. It has committed to investors that it will focus on these two countries with 70% of its funds allocated to the two markets. The fund also has a mandate to invest in South Korea, Taiwan, Malaysia, Hong Kong and Singapore. Asian Giants is a seven-year unlisted fund. It is scheduled to close by month end.
AMP Capital currently has in excess of A$104 billion ($92.7 billion) of assets under management. As of March 31 this year it has A$3.5 billion invested in infrastructure in Australia, New Zealand, Asia and Europe. AMP has been investing in infrastructure in Asia since 1994.
A number of international firms have been attracted by the opportunity IndiaÆs gaping infrastructure deficit provides to deploy funds. From Australia, Macquarie and Babcock & Brown are also actively scouting for investments in infrastructure in India.
Gayatri Projects was founded by Sandeep Kumar Reddy, who is managing director of the company. He and his family own 55% of the company. Another 24% is held by institutional investors including the Unit Trust of India (8.6%), Goldman Sachs Investments Mauritius (3.72%) and IL&FS Trust Company (6.47%).
Gayatri ProjectsÆ shares closed on Friday at Rs243.50 on the BSE, down 1.5%, in a market which traded mostly flat.
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