December 13, 2011 [The Economics Times] - UTI's private equity arm, UTI Capital, has bought 4% stake in Indian Oiltanking, a joint venture between state-run Indian Oil Corporation and Germany's Oiltanking, for Rs 100 crore.
Indian Oiltanking, which builds operating terminals and storage facilities for petroleum products, will use the proceeds to fund its upcoming storage terminal in Paradip and for its overseas EPC projects, said Jayanta Bhuyan, managing director, Indian Oiltanking.
“We have been looking at raising funds from private equity players primarily to fund our expansion plans.” Mumbai based unlisted joint venture company, founded in 1997, has raised cash from the PE investor after it dropped plans for an initial public offering due to choppy market conditions. It had filed for a $160 million public issue last year.
The company reported a turnover of Rs 1,750 crore during the last financial year. Sensex was down a fifth this year, prompting many companies to either postpone or look at other fundraising options.
UTI Capital’s decision to buy into the company underscores the growing number of private equity investments. PE investments in India jumped 31% to $7.89 billion in the first three quarters of 2011, according to data from auditing and consultancy firm KPMG.
PE investment in infrastructure in India has risen from about $1 billion in 2006 to $4 billion last year, said a recent Bain & Co report. It also predicted that the PE activity could grow 25-50% a year over the next three years.
“Investments in infrastructure and infrastructure services have not slowed down despite choppy economic environment. This is a sector which can boost GDP growth,” said Bala Deshpande, senior managing director of US based private equity firm NEA India.
