Actis to buy into GVK's power business

Private equity investor Actis is set to acquire a stake in infrastructure major GVK's power business for about Rs 1,000 crore, according to sources close to the development.

The deal was close to being finalised and would be done over the next six-eight weeks, two sources involved in finalising the deal told Business Standard.

A GVK spokesperson refused to comment, while Actis did not respond to an e-mail query.

The UK-based PE fund could invest in the Hyderabad-headquartered company through its $750-million Emerging Markets Fund, with infrastructure in focus, said a person involved with the negotiations.

Actis, which focuses on emerging markets, had earlier talked about India having the highest share in its $2.9-billion global fund. Indicating a build-up in deals in the pipeline, Actis' Partner and Head for South Asia JM Trivedi had told Business Standard the share of the company's investment in India could go as high as $1.2 billion.

Actis has already partnered with Tata Realty and Infrastructure Ltd (TRIL) to invest $200 million (around Rs 950 crore) into a joint venture that will focus on road construction. Actis has committed an investment of $77.5 million into the joint venture, TRIL Roads. The company has set a target to execute roads and highway projects worth $2 billion (around Rs 9,500 crore) in the next few years.

GVK, which has lined up a slew of power projects, would leverage the expanded equity base to raise debt for funding the projects, sources said. The infrastructure group is implementing power generation projects that will have a combined installed capacity of 2,900 Mw, and is also scouting for more opportunities across the country.

GMR Group, another South-based infrastructure company, recently raised $200 million from Temasek to finance its power sector plans. This was in addition to funds raised through qualified institutional placements.

In recent months, the infrastructure sector, long deprived of funding, has caught the fancy of PE investors. A host of other PE funds, including the proposed $3-billion fund by State Bank of India, Macquarie and IFC, will be in the market looking for opportunities. IDFC Project Equity, IDFC Private Equity and 3i are the other major players looking at opportunities in the infrastructure space.