Macquarie Asia Pacific, Squadron Capital put $20m in AMR

Infrastructure enablers space continues to see steady private equity deal flow. Australia'-based Macquarie Asia Pacific and Hong Kong-based Squadron Capital will invest USD 20 million in AMR Constructions, a Hyderabad-based mining and infrastructure company, for an undisclosed stake. The investors will be issued fresh shares for the capital, sources told VCCircle. The company has already raised USD 32 million from Avigo Capital in October 2010.

Incorporated in 1992, AMR is promoted by A Mahesh Reddy, a first generation entrepreneur. The infrastructure services company filed for an IPO in 2008 but has not been listed yet. According to the company's DRHP, it issued unsecured interest-free Fully Convertible Debentures (FCD) to Grant Investment Limited, which infused Rs 152.26 crore into the company in FY'07-08.

AMR's clients include Singareni Collieries Company Limited, India Cements, Madras Cements, Grasim Cements, Gujarat Industries Power Company Limited and other mineral enterprises.  The company's USP lies in the fact that it is focussed on the mine developer-cum-operator opportunity, which has a huge potential. According to industry estimates, strong demand for mined resources backed by robust growth in the Indian economy should result in the Indian mining industry doubling from the current size of USD 15 billion to USD 30 billion over the next three years.

3NS Capital advised AMR Constructions on the transaction.

Action In "Infrastructure Enablers"

As PE funds cannot make investments in core infrastructure owing to their "growth equity" nature, a lot of action is seen in the ancillaries space or infra enablers.

Recently, Clearwater Capital hiked its stake in Diamond Cables by purchasing 2.2% stake for around Rs 10 crore through the secondary market which takes its total holding to 13.77%. Originally an electrical products maker, the company has diversified into a manufacturer of power transmission equipment and turnkey services provider (EPC).

NYLIM Jacob Ballas India Fund III, LLC, a Mauritius-based private equity vehicle dedicated to India, infused Rs 152 crore into SEW Infrastructure Ltd, an engineering, procurement and construction (EPC) company in Hyderabad.

Axis Private Equity already has investments of Rs 126 crore in Delhi-based railway line manufacturer Harish Chandra India Ltd (HCIL) and Rs 60 crore in Vishwa Infrastructures and Services, which executes projects in the water supply and sanitation sector.

Clearly, deals are coming back particularly where infrastructure is the central theme. According to analysts, while the government has announced plans for infrastructure investment of USD 1 trillion over FY12-17 (2X the amount for FY07-12), it needs to fill critical gaps in planning, policies and procedures before such magical numbers can be hit. About 50% of this USD 1 trillion will be met by private sector schemes.

By: Madhav Chanchani