US-based private equity firm I Squared Capital is planning to invest between $500 million to $1 billion in infrastructure projects in India. According to a report in Livemint, the company is looking to invest in road assets worth 8000 crore rupees and rooftop solar-powered projects worth over 2000 crores. It also plans to infuse some money into logistics business and warehouses from its fund allocated to road assets.
I Squared Capital had raised a $3 billion fund called ISQ Global Infrastructure Fund last year which has now grown to $3.8 billion. And investments in India are expected to come out of that. Talking about these investment plans, Gautam Bhandari, partner at I Squared Capital said,
While we don’t have country-specific allocations, we can see ourselves putting somewhere from $500-600 million to a billion dollar plus in the country over the life of our fund. If the right opportunity shows up, then we can transact at that scale.
I-Squared capital has already invested about 1000 crore rupees in three major Indian road projects through its investment platform Cube Highways and Infrastructure Pte Ltd. These include acquiring stakes in Madhucon Agra Jaipur Expressways Ltd(74%), Western UP Tollway Ltd (100%), and Jaipur Mahua Tollways Pvt. Ltd (74%).
In addition to the planned investment of 8000 crores in road assets, Cube Highway also plans to venture into logistics business, warehousing and wayside amenities looking to convert two of their roads to intelligent highways.
Infrastructure investments, particularly in building roads and highways, in India were traditionally considered risky without any clearly defined regulatory and policy frameworks. However, things have changed in recent times with the government and National Highway Authority of India (NHAI) introducing standardized concession agreements and progressive policies which have reduced the risk.
Commenting on the same, Bhandari said,
We take a very nuanced approach, where we like some of the assets within infrastructure in India; we think some assets need lot of policy and regulatory help before they can become mature enough for investments. So, specifically, the road sector is one which we have identified in India as being attractive globally.
Another arm of I-Squared Capital, Amplus Energy Solutions Pvt. Ltd, is focused on working on rooftop solar power projects for industrial and commercial clients. The company has committed an investment in assets worth 2000 crores in this renewable energy division.
However, at present, it is only looking forward to small term investments instead of going for large scale power projects as they tend to be more competitive with small gains.
I Squared capital is known for its investments in energy, utilities, and transport sector in North America, Europe, and selected high growth economies like India and China. It has offices in New York, Houston, London, New Delhi, Hong Kong and Singapore.